Correlation Between RCS MediaGroup and Mill City

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

Diversification Opportunities for RCS MediaGroup and Mill City

-0.55

Correlation Coefficient

RCS MediaGroup  Mill City

Excellent diversification

The 3 months correlation between RCS and Mill is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Mill City go up and down completely randomly.

Pair Corralation between RCS MediaGroup and Mill City

Assuming the 90 days horizon RCS MediaGroup is expected to generate 17.08 times less return on investment than Mill City. But when comparing it to its historical volatility, RCS MediaGroup SpA is 11.59 times less risky than Mill City. It trades about 0.04 of its potential returns per unit of risk. Mill City Ventures is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  205.00  in Mill City Ventures on September 24, 2024 and sell it today you would lose (6.00) from holding Mill City Ventures or give up 2.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	71.64%
Values	Daily Returns

RCS MediaGroup SpA  vs.  Mill City Ventures

RCS MediaGroup SpA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in RCS MediaGroup SpA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, RCS MediaGroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mill City Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mill City Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with RCS MediaGroup and Mill City

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

The idea behind RCS MediaGroup SpA and Mill City Ventures 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.