Correlation Between RCS MediaGroup and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and QBE Insurance 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 QBE Insurance 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 QBE Insurance Group, you can compare the effects of market volatilities on RCS MediaGroup and QBE Insurance 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 QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and QBE Insurance.
Diversification Opportunities for RCS MediaGroup and QBE Insurance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RCS and QBE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and QBE Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QBE Insurance Group 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 QBE Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QBE Insurance Group has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and QBE Insurance go up and down completely randomly.
Pair Corralation between RCS MediaGroup and QBE Insurance
Assuming the 90 days horizon RCS MediaGroup SpA is expected to generate 0.61 times more return on investment than QBE Insurance. However, RCS MediaGroup SpA is 1.64 times less risky than QBE Insurance. It trades about 0.36 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.21 per unit of risk. If you would invest 85.00 in RCS MediaGroup SpA on August 31, 2024 and sell it today you would earn a total of 4.00 from holding RCS MediaGroup SpA or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. QBE Insurance Group
Performance |
| Timeline |
| RCS MediaGroup SpA |
| QBE Insurance Group |
RCS MediaGroup and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and QBE Insurance
The main advantage of trading using opposite RCS MediaGroup and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, QBE Insurance 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 QBE Insurance will offset losses from the drop in QBE Insurance'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 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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