Correlation Between Making Science and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Making Science 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 Making Science and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Making Science Group and Publicis Groupe SA, you can compare the effects of market volatilities on Making Science 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 Making Science with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Making Science and Publicis Groupe.
Diversification Opportunities for Making Science and Publicis Groupe
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Making and Publicis is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Making Science Group 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 Making Science 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 Making Science Group 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 Making Science i.e., Making Science and Publicis Groupe go up and down completely randomly.
Pair Corralation between Making Science and Publicis Groupe
Assuming the 90 days trading horizon Making Science Group is expected to under-perform the Publicis Groupe. But the stock apears to be less risky and, when comparing its historical volatility, Making Science Group is 1.28 times less risky than Publicis Groupe. The stock trades about -0.02 of its potential returns per unit of risk. The Publicis Groupe SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,532 in Publicis Groupe SA on September 12, 2024 and sell it today you would earn a total of 768.00 from holding Publicis Groupe SA or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Making Science Group vs. Publicis Groupe SA
Performance |
| Timeline |
| Making Science Group |
| Publicis Groupe SA |
Making Science and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Making Science and Publicis Groupe
The main advantage of trading using opposite Making Science and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Making Science 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.| Making Science vs. Onlineformapro SA | Making Science vs. Boiron SA | Making Science vs. Gaztransport Technigaz SAS | Making Science vs. BEBO Health SA |
| Publicis Groupe vs. Bouygues SA | Publicis Groupe vs. Legrand SA | Publicis Groupe vs. Sodexo SA | Publicis Groupe vs. Compagnie de Saint Gobain |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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