Correlation Between RCS MediaGroup and REMEDY ENTERTAINMENT

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

Diversification Opportunities for RCS MediaGroup and REMEDY ENTERTAINMENT

0.71

Correlation Coefficient

RCS MediaGroup  REMEDY ENTERTAINMENT

Poor diversification

The 3 months correlation between RCS and REMEDY is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and REMEDY ENTERTAINMENT OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMEDY ENTERTAINMENT OYJ has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and REMEDY ENTERTAINMENT go up and down completely randomly.

Pair Corralation between RCS MediaGroup and REMEDY ENTERTAINMENT

Assuming the 90 days trading horizon RCS MediaGroup SpA is expected to generate 0.73 times more return on investment than REMEDY ENTERTAINMENT. However, RCS MediaGroup SpA is 1.37 times less risky than REMEDY ENTERTAINMENT. It trades about 0.06 of its potential returns per unit of risk. REMEDY ENTERTAINMENT OYJ is currently generating about -0.02 per unit of risk. If you would invest  59.00  in RCS MediaGroup SpA on March 29, 2025 and sell it today you would earn a total of  39.00  from holding RCS MediaGroup SpA or generate 66.1% return on investment over 90 days.

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

RCS MediaGroup SpA  vs.  REMEDY ENTERTAINMENT OYJ

RCS MediaGroup SpA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RCS MediaGroup SpA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, RCS MediaGroup may actually be approaching a critical reversion point that can send shares even higher in July 2025.

REMEDY ENTERTAINMENT OYJ

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in REMEDY ENTERTAINMENT OYJ are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REMEDY ENTERTAINMENT may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with RCS MediaGroup and REMEDY ENTERTAINMENT

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

The idea behind RCS MediaGroup SpA and REMEDY ENTERTAINMENT OYJ 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.