Correlation Between ACHETER-LOUER and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both ACHETER-LOUER and Publicis Groupe 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 ACHETER-LOUER and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACHETER LOUER EO 145612 and Publicis Groupe SA, you can compare the effects of market volatilities on ACHETER-LOUER and Publicis Groupe 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 ACHETER-LOUER with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACHETER-LOUER and Publicis Groupe.
Diversification Opportunities for ACHETER-LOUER and Publicis Groupe
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ACHETER-LOUER and Publicis is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ACHETER LOUER EO 145612 and Publicis Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Publicis Groupe SA and ACHETER-LOUER 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 ACHETER LOUER EO 145612 are associated (or correlated) with Publicis Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Publicis Groupe SA has no effect on the direction of ACHETER-LOUER i.e., ACHETER-LOUER and Publicis Groupe go up and down completely randomly.
Pair Corralation between ACHETER-LOUER and Publicis Groupe
Assuming the 90 days horizon ACHETER LOUER EO 145612 is expected to generate 18.23 times more return on investment than Publicis Groupe. However, ACHETER-LOUER is 18.23 times more volatile than Publicis Groupe SA. It trades about 0.02 of its potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.05 per unit of risk. If you would invest 1,500 in ACHETER LOUER EO 145612 on October 18, 2024 and sell it today you would lose (1,490) from holding ACHETER LOUER EO 145612 or give up 99.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
ACHETER LOUER EO 145612 vs. Publicis Groupe SA
Performance |
| Timeline |
| ACHETER LOUER EO |
| Publicis Groupe SA |
ACHETER-LOUER and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACHETER-LOUER and Publicis Groupe
The main advantage of trading using opposite ACHETER-LOUER and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACHETER-LOUER position performs unexpectedly, Publicis Groupe 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 Publicis Groupe will offset losses from the drop in Publicis Groupe's long position.| ACHETER-LOUER vs. Publicis Groupe SA | ACHETER-LOUER vs. Omnicom Group | ACHETER-LOUER vs. The Interpublic Group | ACHETER-LOUER vs. WPP PLC |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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