Correlation Between RCS MediaGroup and LENSAR

Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and LENSAR 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 LENSAR 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 LENSAR Inc, you can compare the effects of market volatilities on RCS MediaGroup and LENSAR 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 LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and LENSAR.

Diversification Opportunities for RCS MediaGroup and LENSAR

0.74

Correlation Coefficient

RCS MediaGroup  LENSAR

Poor diversification

The 3 months correlation between RCS and LENSAR is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc 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 LENSAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENSAR Inc has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and LENSAR go up and down completely randomly.

Pair Corralation between RCS MediaGroup and LENSAR

Assuming the 90 days horizon RCS MediaGroup SpA is expected to generate 0.62 times more return on investment than LENSAR. However, RCS MediaGroup SpA is 1.61 times less risky than LENSAR. It trades about 0.25 of its potential returns per unit of risk. LENSAR Inc is currently generating about 0.1 per unit of risk. If you would invest  86.00  in RCS MediaGroup SpA on September 15, 2024 and sell it today you would earn a total of  7.00  from holding RCS MediaGroup SpA or generate 8.14% return on investment over 90 days.

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

RCS MediaGroup SpA  vs.  LENSAR Inc

RCS MediaGroup SpA

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RCS MediaGroup SpA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, RCS MediaGroup reported solid returns over the last few months and may actually be approaching a breakup point.

LENSAR Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RCS MediaGroup and LENSAR

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

The idea behind RCS MediaGroup SpA and LENSAR Inc 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 Anywhere module to track or share privately all of your investments from the convenience of any device.