Correlation Between RCS MediaGroup and Schibsted ASA

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Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Schibsted ASA 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 Schibsted ASA 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 Schibsted ASA ADR, you can compare the effects of market volatilities on RCS MediaGroup and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Schibsted ASA.

Diversification Opportunities for RCS MediaGroup and Schibsted ASA

RCSSchibstedDiversified AwayRCSSchibstedDiversified Away100%
-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between RCS and Schibsted is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Schibsted ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA ADR 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA ADR has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Schibsted ASA go up and down completely randomly.

Pair Corralation between RCS MediaGroup and Schibsted ASA

Assuming the 90 days horizon RCS MediaGroup SpA is expected to generate 0.37 times more return on investment than Schibsted ASA. However, RCS MediaGroup SpA is 2.69 times less risky than Schibsted ASA. It trades about 0.08 of its potential returns per unit of risk. Schibsted ASA ADR is currently generating about -0.03 per unit of risk. If you would invest  88.00  in RCS MediaGroup SpA on November 26, 2024 and sell it today you would earn a total of  6.00  from holding RCS MediaGroup SpA or generate 6.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy93.65%
ValuesDaily Returns

RCS MediaGroup SpA  vs.  Schibsted ASA ADR

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50510
JavaScript chart by amCharts 3.21.15RZSMF SBSNY
       Timeline  
RCS MediaGroup SpA 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in RCS MediaGroup SpA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, RCS MediaGroup may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.880.90.920.940.960.981
Schibsted ASA ADR 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Schibsted ASA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb282930313233343536

RCS MediaGroup and Schibsted ASA Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.59-3.44-2.29-1.130.01921.182.373.574.77 0.050.100.15
JavaScript chart by amCharts 3.21.15RZSMF SBSNY
       Returns  

Pair Trading with RCS MediaGroup and Schibsted ASA

The main advantage of trading using opposite RCS MediaGroup and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.
The idea behind RCS MediaGroup SpA and Schibsted ASA ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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