Correlation Between Cardlytics and Omnicom
Can any of the company-specific risk be diversified away by investing in both Cardlytics 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 Cardlytics and Omnicom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardlytics and Omnicom Group, you can compare the effects of market volatilities on Cardlytics 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 Cardlytics with a short position of Omnicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardlytics and Omnicom.
Diversification Opportunities for Cardlytics and Omnicom
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cardlytics and Omnicom is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cardlytics and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group and Cardlytics 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 Cardlytics 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 Cardlytics i.e., Cardlytics and Omnicom go up and down completely randomly.
Pair Corralation between Cardlytics and Omnicom
Given the investment horizon of 90 days Cardlytics is expected to generate 3.57 times more return on investment than Omnicom. However, Cardlytics is 3.57 times more volatile than Omnicom Group. It trades about 0.03 of its potential returns per unit of risk. Omnicom Group is currently generating about 0.07 per unit of risk. If you would invest 399.00 in Cardlytics on August 30, 2024 and sell it today you would lose (2.00) from holding Cardlytics or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardlytics vs. Omnicom Group
Performance |
| Timeline |
| Cardlytics |
| Omnicom Group |
Cardlytics and Omnicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardlytics and Omnicom
The main advantage of trading using opposite Cardlytics and Omnicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardlytics 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.| Cardlytics vs. Criteo Sa | Cardlytics vs. Deluxe | Cardlytics vs. Emerald Expositions Events | Cardlytics vs. Marchex |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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