Correlation Between RCS MediaGroup and Uni President
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Uni President 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 Uni President 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 Uni President China Holdings, you can compare the effects of market volatilities on RCS MediaGroup and Uni President 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 Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Uni President.
Diversification Opportunities for RCS MediaGroup and Uni President
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RCS and Uni is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Uni President China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President China 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 Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President China has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Uni President go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Uni President
Assuming the 90 days horizon RCS MediaGroup is expected to generate 44.41 times less return on investment than Uni President. But when comparing it to its historical volatility, RCS MediaGroup SpA is 16.25 times less risky than Uni President. It trades about 0.04 of its potential returns per unit of risk. Uni President China Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Uni President China Holdings on September 3, 2024 and sell it today you would earn a total of 74.00 from holding Uni President China Holdings or generate 493.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.92% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. Uni President China Holdings
Performance |
| Timeline |
| RCS MediaGroup SpA |
| Uni President China |
RCS MediaGroup and Uni President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and Uni President
The main advantage of trading using opposite RCS MediaGroup and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President'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 |
| Uni President vs. Verde Clean Fuels | Uni President vs. Herc Holdings | Uni President vs. Willscot Mobile Mini | Uni President vs. Tootsie Roll Industries |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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