Correlation Between RCS MediaGroup and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Tianjin Capital 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 Tianjin Capital 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 Tianjin Capital Environmental, you can compare the effects of market volatilities on RCS MediaGroup and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Tianjin Capital.
Diversification Opportunities for RCS MediaGroup and Tianjin Capital
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RCS and Tianjin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Tianjin Capital go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Tianjin Capital
Assuming the 90 days horizon RCS MediaGroup SpA is expected to generate 0.96 times more return on investment than Tianjin Capital. However, RCS MediaGroup SpA is 1.04 times less risky than Tianjin Capital. It trades about 0.15 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.13 per unit of risk. If you would invest 82.00 in RCS MediaGroup SpA on September 12, 2024 and sell it today you would earn a total of 11.00 from holding RCS MediaGroup SpA or generate 13.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
RCS MediaGroup SpA vs. Tianjin Capital Environmental
Performance |
Timeline |
RCS MediaGroup SpA |
Tianjin Capital Envi |
RCS MediaGroup and Tianjin Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RCS MediaGroup and Tianjin Capital
The main advantage of trading using opposite RCS MediaGroup and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital's long position.RCS MediaGroup vs. Legible | RCS MediaGroup vs. Sylvania Platinum Limited | RCS MediaGroup vs. Thunderbird Entertainment Group | RCS MediaGroup vs. PAX Global Technology |
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Check out your portfolio center.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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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