Correlation Between Genfit and RCS MediaGroup

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

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

Diversification Opportunities for Genfit and RCS MediaGroup

-0.73

Correlation Coefficient

Genfit  RCS MediaGroup

Pay attention - limited upside

The 3 months correlation between Genfit and RCS is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Genfit 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 Genfit 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 Genfit 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 Genfit i.e., Genfit and RCS MediaGroup go up and down completely randomly.

Pair Corralation between Genfit and RCS MediaGroup

Given the investment horizon of 90 days Genfit is expected to under-perform the RCS MediaGroup. In addition to that, Genfit is 2.11 times more volatile than RCS MediaGroup SpA. It trades about -0.3 of its total potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.08 per unit of volatility. If you would invest  85.00  in RCS MediaGroup SpA on September 27, 2024 and sell it today you would earn a total of  4.00  from holding RCS MediaGroup SpA or generate 4.71% return on investment over 90 days.

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

Genfit  vs.  RCS MediaGroup SpA

Genfit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genfit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

RCS MediaGroup SpA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RCS MediaGroup SpA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, RCS MediaGroup is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Genfit and RCS MediaGroup

The main advantage of trading using opposite Genfit and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit 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 Genfit 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.