Correlation Between RCS MediaGroup and Veea

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

Diversification Opportunities for RCS MediaGroup and Veea

-0.51

Correlation Coefficient

RCS MediaGroup  Veea

Excellent diversification

The 3 months correlation between RCS and Veea is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea 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 Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Veea go up and down completely randomly.

Pair Corralation between RCS MediaGroup and Veea

Assuming the 90 days horizon RCS MediaGroup is expected to generate 31.81 times less return on investment than Veea. But when comparing it to its historical volatility, RCS MediaGroup SpA is 21.52 times less risky than Veea. It trades about 0.06 of its potential returns per unit of risk. Veea Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Veea Inc on December 4, 2024 and sell it today you would lose (4.27) from holding Veea Inc or give up 30.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	74.93%
Values	Daily Returns

RCS MediaGroup SpA  vs.  Veea Inc

RCS MediaGroup SpA

Risk-Adjusted Performance

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 April 2025.

Veea Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Veea Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Veea showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RCS MediaGroup and Veea

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

The idea behind RCS MediaGroup SpA and Veea 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.