Correlation Between RTL Group and SES SA
Can any of the company-specific risk be diversified away by investing in both RTL Group and SES SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining RTL Group and SES SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTL Group SA and SES SA, you can compare the effects of market volatilities on RTL Group and SES SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in RTL Group with a short position of SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and SES SA.
Diversification Opportunities for RTL Group and SES SA
Poor diversification
The 3 months correlation between RTL and SES is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA and RTL Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on RTL Group SA are associated (or correlated) with SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of RTL Group i.e., RTL Group and SES SA go up and down completely randomly.
Pair Corralation between RTL Group and SES SA
Assuming the 90 days trading horizon RTL Group SA is expected to under-perform the SES SA. But the stock apears to be less risky and, when comparing its historical volatility, RTL Group SA is 1.61 times less risky than SES SA. The stock trades about -0.06 of its potential returns per unit of risk. The SES SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 508.00 in SES SA on August 29, 2024 and sell it today you would lose (168.00) from holding SES SA or give up 33.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTL Group SA vs. SES SA
Performance |
| Timeline |
| RTL Group SA |
| SES SA |
RTL Group and SES SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and SES SA
The main advantage of trading using opposite RTL Group and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group position performs unexpectedly, SES SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SES SA will offset losses from the drop in SES SA's long position.| RTL Group vs. SLR Investment Corp | RTL Group vs. SEI INVESTMENTS | RTL Group vs. Calibre Mining Corp | RTL Group vs. Chunghwa Telecom Co |
| SES SA vs. KRISPY KREME DL 01 | SES SA vs. Consolidated Communications Holdings | SES SA vs. INTER CARS SA | SES SA vs. GRUPO CARSO A1 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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