Correlation Between CENTURIA OFFICE and RCS MediaGroup

Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE 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 CENTURIA OFFICE and RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CENTURIA OFFICE REIT and RCS MediaGroup SpA, you can compare the effects of market volatilities on CENTURIA OFFICE 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 CENTURIA OFFICE with a short position of RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and RCS MediaGroup.

Diversification Opportunities for CENTURIA OFFICE and RCS MediaGroup

-0.72

Correlation Coefficient

CENTURIA OFFICE  RCS MediaGroup

Pay attention - limited upside

The 3 months correlation between CENTURIA and RCS is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT 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 CENTURIA OFFICE i.e., CENTURIA OFFICE and RCS MediaGroup go up and down completely randomly.

Pair Corralation between CENTURIA OFFICE and RCS MediaGroup

Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to under-perform the RCS MediaGroup. In addition to that, CENTURIA OFFICE is 1.1 times more volatile than RCS MediaGroup SpA. It trades about 0.0 of its total potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.14 per unit of volatility. If you would invest  77.00  in RCS MediaGroup SpA on October 6, 2024 and sell it today you would earn a total of  9.00  from holding RCS MediaGroup SpA or generate 11.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CENTURIA OFFICE REIT  vs.  RCS MediaGroup SpA

CENTURIA OFFICE REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CENTURIA OFFICE REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CENTURIA OFFICE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

RCS MediaGroup SpA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RCS MediaGroup SpA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, RCS MediaGroup reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CENTURIA OFFICE and RCS MediaGroup

The main advantage of trading using opposite CENTURIA OFFICE and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE 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.

The idea behind CENTURIA OFFICE REIT and RCS MediaGroup SpA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.