Correlation Between Tsingtao Brewery and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and RCS MediaGroup 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 Tsingtao Brewery and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and RCS MediaGroup SpA, you can compare the effects of market volatilities on Tsingtao Brewery and RCS MediaGroup 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 Tsingtao Brewery with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and RCS MediaGroup.
Diversification Opportunities for Tsingtao Brewery and RCS MediaGroup
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tsingtao and RCS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and RCS MediaGroup SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCS MediaGroup SpA and Tsingtao Brewery 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 Tsingtao Brewery are associated (or correlated) with RCS MediaGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCS MediaGroup SpA has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and RCS MediaGroup
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 2.57 times less return on investment than RCS MediaGroup. But when comparing it to its historical volatility, Tsingtao Brewery is 1.07 times less risky than RCS MediaGroup. It trades about 0.1 of its potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 79.00 in RCS MediaGroup SpA on September 13, 2024 and sell it today you would earn a total of 8.00 from holding RCS MediaGroup SpA or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. RCS MediaGroup SpA
Performance |
| Timeline |
| Tsingtao Brewery |
| RCS MediaGroup SpA |
Tsingtao Brewery and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and RCS MediaGroup
The main advantage of trading using opposite Tsingtao Brewery and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, RCS MediaGroup 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 RCS MediaGroup will offset losses from the drop in RCS MediaGroup's long position.| Tsingtao Brewery vs. Gamma Communications plc | Tsingtao Brewery vs. QURATE RETAIL INC | Tsingtao Brewery vs. Cogent Communications Holdings | Tsingtao Brewery vs. Zoom Video Communications |
| RCS MediaGroup vs. INTERSHOP Communications Aktiengesellschaft | RCS MediaGroup vs. ANTA SPORTS PRODUCT | RCS MediaGroup vs. Internet Thailand PCL | RCS MediaGroup vs. KOOL2PLAY SA ZY |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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