Correlation Between RCS MediaGroup and Dermapharm Holding
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and Dermapharm Holding 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 Dermapharm Holding 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 Dermapharm Holding SE, you can compare the effects of market volatilities on RCS MediaGroup and Dermapharm Holding 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 Dermapharm Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and Dermapharm Holding.
Diversification Opportunities for RCS MediaGroup and Dermapharm Holding
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RCS and Dermapharm is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and Dermapharm Holding SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dermapharm Holding 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 Dermapharm Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dermapharm Holding has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and Dermapharm Holding go up and down completely randomly.
Pair Corralation between RCS MediaGroup and Dermapharm Holding
Assuming the 90 days trading horizon RCS MediaGroup SpA is expected to generate 1.61 times more return on investment than Dermapharm Holding. However, RCS MediaGroup is 1.61 times more volatile than Dermapharm Holding SE. It trades about 0.09 of its potential returns per unit of risk. Dermapharm Holding SE is currently generating about -0.06 per unit of risk. If you would invest 88.00 in RCS MediaGroup SpA on April 23, 2025 and sell it today you would earn a total of 12.00 from holding RCS MediaGroup SpA or generate 13.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
RCS MediaGroup SpA vs. Dermapharm Holding SE
Performance |
Timeline |
RCS MediaGroup SpA |
Dermapharm Holding |
RCS MediaGroup and Dermapharm Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RCS MediaGroup and Dermapharm Holding
The main advantage of trading using opposite RCS MediaGroup and Dermapharm Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, Dermapharm Holding 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 Dermapharm Holding will offset losses from the drop in Dermapharm Holding's long position.RCS MediaGroup vs. CHINA SOUTHN AIR H | RCS MediaGroup vs. GWILLI FOOD | RCS MediaGroup vs. Air New Zealand | RCS MediaGroup vs. SEALED AIR |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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