Correlation Between RCS MediaGroup and National CineMedia
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and National CineMedia 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 National CineMedia 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 National CineMedia, you can compare the effects of market volatilities on RCS MediaGroup and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and National CineMedia.
Diversification Opportunities for RCS MediaGroup and National CineMedia
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between RCS and National is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and National CineMedia go up and down completely randomly.
Pair Corralation between RCS MediaGroup and National CineMedia
Assuming the 90 days horizon RCS MediaGroup is expected to generate 1.33 times less return on investment than National CineMedia. But when comparing it to its historical volatility, RCS MediaGroup SpA is 1.35 times less risky than National CineMedia. It trades about 0.32 of its potential returns per unit of risk. National CineMedia is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 652.00 in National CineMedia on September 12, 2024 and sell it today you would earn a total of 82.00 from holding National CineMedia or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. National CineMedia
Performance |
| Timeline |
| RCS MediaGroup SpA |
| National CineMedia |
RCS MediaGroup and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and National CineMedia
The main advantage of trading using opposite RCS MediaGroup and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia'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 |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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