Correlation Between Groupe LDLC and Reworld Media

Can any of the company-specific risk be diversified away by investing in both Groupe LDLC and Reworld Media 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 Groupe LDLC and Reworld Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Groupe LDLC SA and Reworld Media, you can compare the effects of market volatilities on Groupe LDLC and Reworld Media 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 Groupe LDLC with a short position of Reworld Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe LDLC and Reworld Media.

Diversification Opportunities for Groupe LDLC and Reworld Media

0.34

Correlation Coefficient

Groupe LDLC  Reworld Media

Weak diversification

The 3 months correlation between Groupe and Reworld is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Groupe LDLC SA and Reworld Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reworld Media and Groupe LDLC 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 Groupe LDLC SA are associated (or correlated) with Reworld Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reworld Media has no effect on the direction of Groupe LDLC i.e., Groupe LDLC and Reworld Media go up and down completely randomly.

Pair Corralation between Groupe LDLC and Reworld Media

Assuming the 90 days trading horizon Groupe LDLC SA is expected to generate 1.34 times more return on investment than Reworld Media. However, Groupe LDLC is 1.34 times more volatile than Reworld Media. It trades about 0.07 of its potential returns per unit of risk. Reworld Media is currently generating about 0.07 per unit of risk. If you would invest  674.00  in Groupe LDLC SA on April 22, 2025 and sell it today you would earn a total of  82.00  from holding Groupe LDLC SA or generate 12.17% return on investment over 90 days.

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

Groupe LDLC SA  vs.  Reworld Media

Groupe LDLC SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe LDLC SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Groupe LDLC reported solid returns over the last few months and may actually be approaching a breakup point.

Reworld Media

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Reworld Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Reworld Media may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Groupe LDLC and Reworld Media

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

The idea behind Groupe LDLC SA and Reworld Media 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.