Correlation Between Clean Energy and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Clean Energy 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 Clean Energy and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Energy Fuels and RCS MediaGroup SpA, you can compare the effects of market volatilities on Clean Energy 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 Clean Energy with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and RCS MediaGroup.
Diversification Opportunities for Clean Energy and RCS MediaGroup
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clean and RCS is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels 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 Clean Energy 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 Clean Energy Fuels 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 Clean Energy i.e., Clean Energy and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Clean Energy and RCS MediaGroup
Assuming the 90 days horizon Clean Energy Fuels is expected to generate 1.42 times more return on investment than RCS MediaGroup. However, Clean Energy is 1.42 times more volatile than RCS MediaGroup SpA. It trades about 0.16 of its potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.08 per unit of risk. If you would invest 255.00 in Clean Energy Fuels on October 28, 2024 and sell it today you would earn a total of 26.00 from holding Clean Energy Fuels or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Energy Fuels vs. RCS MediaGroup SpA
Performance |
| Timeline |
| Clean Energy Fuels |
| RCS MediaGroup SpA |
Clean Energy and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and RCS MediaGroup
The main advantage of trading using opposite Clean Energy and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy 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.| Clean Energy vs. Reliance Industries Limited | Clean Energy vs. Marathon Petroleum Corp | Clean Energy vs. Valero Energy | Clean Energy vs. Phillips 66 |
| RCS MediaGroup vs. RELX PLC | RCS MediaGroup vs. Relx PLC ADR | RCS MediaGroup vs. Wolters Kluwer NV | RCS MediaGroup vs. WOLTERS KLUWER ADR |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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