Correlation Between RCS MediaGroup and Stepan
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Stepan 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 Stepan 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 Stepan Company, you can compare the effects of market volatilities on RCS MediaGroup and Stepan 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 Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Stepan.
Diversification Opportunities for RCS MediaGroup and Stepan
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between RCS and Stepan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company 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 Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Stepan go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Stepan
Assuming the 90 days horizon RCS MediaGroup SpA is expected to generate 0.76 times more return on investment than Stepan. However, RCS MediaGroup SpA is 1.32 times less risky than Stepan. It trades about 0.08 of its potential returns per unit of risk. Stepan Company is currently generating about -0.09 per unit of risk. If you would invest 92.00 in RCS MediaGroup SpA on November 29, 2024 and sell it today you would earn a total of 2.00 from holding RCS MediaGroup SpA or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. Stepan Company
Performance |
| Timeline |
| RCS MediaGroup SpA |
| Stepan Company |
RCS MediaGroup and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and Stepan
The main advantage of trading using opposite RCS MediaGroup and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan'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 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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