Correlation Between RCS MediaGroup and H2O Retailing
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and H2O Retailing 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 RCS MediaGroup and H2O Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCS MediaGroup SpA and H2O Retailing, you can compare the effects of market volatilities on RCS MediaGroup and H2O Retailing 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 RCS MediaGroup with a short position of H2O Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and H2O Retailing.
Diversification Opportunities for RCS MediaGroup and H2O Retailing
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RCS and H2O is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and H2O Retailing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H2O Retailing and RCS MediaGroup 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 RCS MediaGroup SpA are associated (or correlated) with H2O Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H2O Retailing has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and H2O Retailing go up and down completely randomly.
Pair Corralation between RCS MediaGroup and H2O Retailing
Assuming the 90 days trading horizon RCS MediaGroup SpA is expected to generate 1.28 times more return on investment than H2O Retailing. However, RCS MediaGroup is 1.28 times more volatile than H2O Retailing. It trades about 0.14 of its potential returns per unit of risk. H2O Retailing is currently generating about 0.07 per unit of risk. If you would invest 87.00 in RCS MediaGroup SpA on December 18, 2024 and sell it today you would earn a total of 16.00 from holding RCS MediaGroup SpA or generate 18.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
RCS MediaGroup SpA vs. H2O Retailing
Performance |
Timeline |
RCS MediaGroup SpA |
H2O Retailing |
RCS MediaGroup and H2O Retailing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RCS MediaGroup and H2O Retailing
The main advantage of trading using opposite RCS MediaGroup and H2O Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, H2O Retailing 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 H2O Retailing will offset losses from the drop in H2O Retailing's long position.RCS MediaGroup vs. MeVis Medical Solutions | RCS MediaGroup vs. ScanSource | RCS MediaGroup vs. CompuGroup Medical SE | RCS MediaGroup vs. Merit Medical Systems |
H2O Retailing vs. COSMOSTEEL HLDGS | H2O Retailing vs. CosmoSteel Holdings Limited | H2O Retailing vs. IRONVELD PLC LS | H2O Retailing vs. United States Steel |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |