Correlation Between RCS MediaGroup and Sabre Corpo
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Sabre Corpo 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 Sabre Corpo 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 Sabre Corpo, you can compare the effects of market volatilities on RCS MediaGroup and Sabre Corpo 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 Sabre Corpo. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Sabre Corpo.
Diversification Opportunities for RCS MediaGroup and Sabre Corpo
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCS and Sabre is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Sabre Corpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Corpo 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 Sabre Corpo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Corpo has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Sabre Corpo go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Sabre Corpo
Assuming the 90 days horizon RCS MediaGroup is expected to generate 3.77 times less return on investment than Sabre Corpo. But when comparing it to its historical volatility, RCS MediaGroup SpA is 3.44 times less risky than Sabre Corpo. It trades about 0.07 of its potential returns per unit of risk. Sabre Corpo is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Sabre Corpo on September 2, 2024 and sell it today you would earn a total of 86.00 from holding Sabre Corpo or generate 28.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. Sabre Corpo
Performance |
| Timeline |
| RCS MediaGroup SpA |
| Sabre Corpo |
RCS MediaGroup and Sabre Corpo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and Sabre Corpo
The main advantage of trading using opposite RCS MediaGroup and Sabre Corpo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Sabre Corpo 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 Sabre Corpo will offset losses from the drop in Sabre Corpo'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 |
| Sabre Corpo vs. Expedia Group | Sabre Corpo vs. Trip Group Ltd | Sabre Corpo vs. Booking Holdings | Sabre Corpo vs. Despegar 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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