Correlation Between RCS MediaGroup and Informa Plc
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Informa Plc 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 RCS MediaGroup and Informa Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCS MediaGroup SpA and Informa plc, you can compare the effects of market volatilities on RCS MediaGroup and Informa Plc 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 RCS MediaGroup with a short position of Informa Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Informa Plc.
Diversification Opportunities for RCS MediaGroup and Informa Plc
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RCS and Informa is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Informa plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Informa plc and RCS MediaGroup 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 RCS MediaGroup SpA are associated (or correlated) with Informa Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Informa plc has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Informa Plc go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Informa Plc
Assuming the 90 days horizon RCS MediaGroup is expected to generate 1.26 times less return on investment than Informa Plc. But when comparing it to its historical volatility, RCS MediaGroup SpA is 8.57 times less risky than Informa Plc. It trades about 0.37 of its potential returns per unit of risk. Informa plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,076 in Informa plc on September 2, 2024 and sell it today you would earn a total of 36.00 from holding Informa plc or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. Informa plc
Performance |
| Timeline |
| RCS MediaGroup SpA |
| Informa plc |
RCS MediaGroup and Informa Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and Informa Plc
The main advantage of trading using opposite RCS MediaGroup and Informa Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Informa Plc 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 Informa Plc will offset losses from the drop in Informa Plc's long position.| RCS MediaGroup vs. Slate Office REIT | RCS MediaGroup vs. HUMANA INC | RCS MediaGroup vs. Aquagold International | RCS MediaGroup vs. Barloworld Ltd ADR |
| Informa Plc vs. Slate Office REIT | Informa Plc vs. HUMANA INC | Informa Plc vs. Aquagold International | Informa Plc vs. Barloworld Ltd ADR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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