Correlation Between Indutrade and Omnicom
Can any of the company-specific risk be diversified away by investing in both Indutrade and Omnicom 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 Indutrade and Omnicom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Omnicom Group, you can compare the effects of market volatilities on Indutrade and Omnicom 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 Indutrade with a short position of Omnicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Omnicom.
Diversification Opportunities for Indutrade and Omnicom
Average diversification
The 3 months correlation between Indutrade and Omnicom is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group and Indutrade 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 Indutrade AB are associated (or correlated) with Omnicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicom Group has no effect on the direction of Indutrade i.e., Indutrade and Omnicom go up and down completely randomly.
Pair Corralation between Indutrade and Omnicom
Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.49 times more return on investment than Omnicom. However, Indutrade AB is 2.04 times less risky than Omnicom. It trades about 0.0 of its potential returns per unit of risk. Omnicom Group is currently generating about -0.24 per unit of risk. If you would invest 28,410 in Indutrade AB on September 15, 2024 and sell it today you would lose (50.00) from holding Indutrade AB or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Indutrade AB vs. Omnicom Group
Performance |
| Timeline |
| Indutrade AB |
| Omnicom Group |
Indutrade and Omnicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Omnicom
The main advantage of trading using opposite Indutrade and Omnicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Omnicom 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 Omnicom will offset losses from the drop in Omnicom's long position.| Indutrade vs. Samsung Electronics Co | Indutrade vs. Samsung Electronics Co | Indutrade vs. Hyundai Motor | Indutrade vs. Reliance Industries Ltd |
| Omnicom vs. Indutrade AB | Omnicom vs. Zegona Communications Plc | Omnicom vs. Komercni Banka | Omnicom vs. Verizon Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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