Correlation Between RCS MediaGroup and Todos Medical

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

Diversification Opportunities for RCS MediaGroup and Todos Medical

-0.16

Correlation Coefficient

RCS MediaGroup  Todos Medical

Good diversification

The 3 months correlation between RCS and Todos is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Todos Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Todos Medical 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 Todos Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Todos Medical has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Todos Medical go up and down completely randomly.

Pair Corralation between RCS MediaGroup and Todos Medical

If you would invest  79.00  in RCS MediaGroup SpA on September 15, 2024 and sell it today you would earn a total of  14.00  from holding RCS MediaGroup SpA or generate 17.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

RCS MediaGroup SpA  vs.  Todos Medical

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.

Todos Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Todos Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Todos Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with RCS MediaGroup and Todos Medical

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

The idea behind RCS MediaGroup SpA and Todos Medical 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.