Correlation Between RCS MediaGroup and Loop Media
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Loop Media 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 Loop Media 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 Loop Media, you can compare the effects of market volatilities on RCS MediaGroup and Loop Media 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 Loop Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Loop Media.
Diversification Opportunities for RCS MediaGroup and Loop Media
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RCS and Loop is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Loop Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Media 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 Loop Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Media has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Loop Media go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Loop Media
Assuming the 90 days horizon RCS MediaGroup SpA is expected to generate 0.6 times more return on investment than Loop Media. However, RCS MediaGroup SpA is 1.67 times less risky than Loop Media. It trades about 0.05 of its potential returns per unit of risk. Loop Media is currently generating about -0.07 per unit of risk. If you would invest 57.00 in RCS MediaGroup SpA on September 12, 2024 and sell it today you would earn a total of 36.00 from holding RCS MediaGroup SpA or generate 63.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 80.83% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. Loop Media
Performance |
| Timeline |
| RCS MediaGroup SpA |
| Loop Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
RCS MediaGroup and Loop Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and Loop Media
The main advantage of trading using opposite RCS MediaGroup and Loop Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Loop Media 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 Loop Media will offset losses from the drop in Loop Media's long position.| RCS MediaGroup vs. Legible | RCS MediaGroup vs. Sylvania Platinum Limited | RCS MediaGroup vs. Thunderbird Entertainment Group | RCS MediaGroup vs. PAX Global Technology |
| Loop Media vs. RCS MediaGroup SpA | Loop Media vs. Northstar Clean Technologies | Loop Media vs. National CineMedia | Loop Media vs. MGIC Investment Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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