Correlation Between Reworld Media and Samse SA

Can any of the company-specific risk be diversified away by investing in both Reworld Media and Samse SA 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 Reworld Media and Samse SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Reworld Media and Samse SA, you can compare the effects of market volatilities on Reworld Media and Samse SA 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 Reworld Media with a short position of Samse SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reworld Media and Samse SA.

Diversification Opportunities for Reworld Media and Samse SA

0.65

Correlation Coefficient

Reworld Media  Samse SA

Poor diversification

The 3 months correlation between Reworld and Samse is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Reworld Media and Samse SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samse SA and Reworld 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 Reworld Media are associated (or correlated) with Samse SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samse SA has no effect on the direction of Reworld Media i.e., Reworld Media and Samse SA go up and down completely randomly.

Pair Corralation between Reworld Media and Samse SA

Assuming the 90 days trading horizon Reworld Media is expected to under-perform the Samse SA. In addition to that, Reworld Media is 1.98 times more volatile than Samse SA. It trades about -0.09 of its total potential returns per unit of risk. Samse SA is currently generating about 0.01 per unit of volatility. If you would invest  14,600  in Samse SA on October 9, 2024 and sell it today you would earn a total of  100.00  from holding Samse SA or generate 0.68% return on investment over 90 days.

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

Reworld Media  vs.  Samse SA

Reworld Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reworld Media has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Samse SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samse SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samse SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Reworld Media and Samse SA

The main advantage of trading using opposite Reworld Media and Samse SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reworld Media position performs unexpectedly, Samse SA 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 Samse SA will offset losses from the drop in Samse SA's long position.

The idea behind Reworld Media and Samse SA 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.