Correlation Between Vivendi SE and RTL GROUP

Can any of the company-specific risk be diversified away by investing in both Vivendi SE and RTL GROUP 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 Vivendi SE and RTL GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vivendi SE and RTL GROUP UNSPADR, you can compare the effects of market volatilities on Vivendi SE and RTL GROUP 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 Vivendi SE with a short position of RTL GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivendi SE and RTL GROUP.

Diversification Opportunities for Vivendi SE and RTL GROUP

0.64

Correlation Coefficient

Vivendi SE  RTL GROUP

Poor diversification

The 3 months correlation between Vivendi and RTL is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SE and RTL GROUP UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL GROUP UNSPADR and Vivendi SE 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 Vivendi SE are associated (or correlated) with RTL GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL GROUP UNSPADR has no effect on the direction of Vivendi SE i.e., Vivendi SE and RTL GROUP go up and down completely randomly.

Pair Corralation between Vivendi SE and RTL GROUP

Assuming the 90 days horizon Vivendi SE is expected to generate 2.88 times less return on investment than RTL GROUP. But when comparing it to its historical volatility, Vivendi SE is 1.46 times less risky than RTL GROUP. It trades about 0.08 of its potential returns per unit of risk. RTL GROUP UNSPADR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  250.00  in RTL GROUP UNSPADR on December 28, 2024 and sell it today you would earn a total of  86.00  from holding RTL GROUP UNSPADR or generate 34.4% return on investment over 90 days.

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

Vivendi SE  vs.  RTL GROUP UNSPADR

Vivendi SE

Risk-Adjusted Performance

Modest

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

RTL GROUP UNSPADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RTL GROUP UNSPADR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, RTL GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vivendi SE and RTL GROUP

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

The idea behind Vivendi SE and RTL GROUP UNSPADR 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.