Correlation Between Salem Media and RTL Group
Can any of the company-specific risk be diversified away by investing in both Salem Media and RTL Group 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 Salem Media and RTL Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salem Media Group and RTL Group SA, you can compare the effects of market volatilities on Salem Media and RTL Group 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 Salem Media with a short position of RTL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salem Media and RTL Group.
Diversification Opportunities for Salem Media and RTL Group
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salem and RTL is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Salem Media Group and RTL Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL Group SA and Salem Media 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 Salem Media Group are associated (or correlated) with RTL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL Group SA has no effect on the direction of Salem Media i.e., Salem Media and RTL Group go up and down completely randomly.
Pair Corralation between Salem Media and RTL Group
If you would invest 310.00 in RTL Group SA on August 24, 2024 and sell it today you would lose (13.00) from holding RTL Group SA or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Salem Media Group vs. RTL Group SA
Performance |
| Timeline |
| Salem Media Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RTL Group SA |
Salem Media and RTL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salem Media and RTL Group
The main advantage of trading using opposite Salem Media and RTL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salem Media position performs unexpectedly, RTL Group 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 RTL Group will offset losses from the drop in RTL Group's long position.| Salem Media vs. Mediaco Holding | Salem Media vs. Saga Communications | Salem Media vs. ProSiebenSat1 Media AG | Salem Media vs. Cumulus Media Class |
| RTL Group vs. ITV plc | RTL Group vs. ITV PLC ADR | RTL Group vs. iHeartMedia | RTL Group vs. ProSiebenSat1 Media AG |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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