Correlation Between Air Transport and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Publicis Groupe SA, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Publicis Groupe.
Diversification Opportunities for Air Transport and Publicis Groupe
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Publicis is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services 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 Air Transport 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 Air Transport Services 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 Air Transport i.e., Air Transport and Publicis Groupe go up and down completely randomly.
Pair Corralation between Air Transport and Publicis Groupe
Assuming the 90 days horizon Air Transport Services is expected to generate 2.23 times more return on investment than Publicis Groupe. However, Air Transport is 2.23 times more volatile than Publicis Groupe SA. It trades about 0.11 of its potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.0 per unit of risk. If you would invest 1,420 in Air Transport Services on October 18, 2024 and sell it today you would earn a total of 720.00 from holding Air Transport Services or generate 50.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Air Transport Services vs. Publicis Groupe SA
Performance |
| Timeline |
| Air Transport Services |
| Publicis Groupe SA |
Air Transport and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Publicis Groupe
The main advantage of trading using opposite Air Transport and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.| Air Transport vs. Aedas Homes SA | Air Transport vs. China Communications Services | Air Transport vs. ADDUS HOMECARE | Air Transport vs. Spirent Communications plc |
| Publicis Groupe vs. Air Transport Services | Publicis Groupe vs. SOGECLAIR SA INH | Publicis Groupe vs. Alaska Air Group | Publicis Groupe vs. RYANAIR HLDGS ADR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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