Correlation Between RCS MediaGroup and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Eldorado Gold 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 Eldorado Gold 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 Eldorado Gold Corp, you can compare the effects of market volatilities on RCS MediaGroup and Eldorado Gold 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 Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Eldorado Gold.
Diversification Opportunities for RCS MediaGroup and Eldorado Gold
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RCS and Eldorado is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Eldorado Gold go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Eldorado Gold
Assuming the 90 days horizon RCS MediaGroup SpA is expected to generate 0.73 times more return on investment than Eldorado Gold. However, RCS MediaGroup SpA is 1.36 times less risky than Eldorado Gold. It trades about 0.19 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.08 per unit of risk. If you would invest 88.00 in RCS MediaGroup SpA on December 28, 2024 and sell it today you would earn a total of 25.00 from holding RCS MediaGroup SpA or generate 28.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
RCS MediaGroup SpA vs. Eldorado Gold Corp
Performance |
Timeline |
RCS MediaGroup SpA |
Eldorado Gold Corp |
RCS MediaGroup and Eldorado Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RCS MediaGroup and Eldorado Gold
The main advantage of trading using opposite RCS MediaGroup and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Eldorado Gold 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 Eldorado Gold will offset losses from the drop in Eldorado Gold's long position.RCS MediaGroup vs. Legible | RCS MediaGroup vs. Sylvania Platinum Limited | RCS MediaGroup vs. Thunderbird Entertainment Group | RCS MediaGroup vs. PAX Global Technology |
Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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