Correlation Between JCDecaux and CLEAR CHANNEL
Can any of the company-specific risk be diversified away by investing in both JCDecaux and CLEAR CHANNEL 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 JCDecaux and CLEAR CHANNEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JCDecaux SA and CLEAR CHANNEL OHA, you can compare the effects of market volatilities on JCDecaux and CLEAR CHANNEL 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 JCDecaux with a short position of CLEAR CHANNEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of JCDecaux and CLEAR CHANNEL.
Diversification Opportunities for JCDecaux and CLEAR CHANNEL
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JCDecaux and CLEAR is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JCDecaux SA and CLEAR CHANNEL OHA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEAR CHANNEL OHA and JCDecaux 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 JCDecaux SA are associated (or correlated) with CLEAR CHANNEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEAR CHANNEL OHA has no effect on the direction of JCDecaux i.e., JCDecaux and CLEAR CHANNEL go up and down completely randomly.
Pair Corralation between JCDecaux and CLEAR CHANNEL
Assuming the 90 days horizon JCDecaux SA is expected to under-perform the CLEAR CHANNEL. But the stock apears to be less risky and, when comparing its historical volatility, JCDecaux SA is 1.85 times less risky than CLEAR CHANNEL. The stock trades about -0.01 of its potential returns per unit of risk. The CLEAR CHANNEL OHA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 98.00 in CLEAR CHANNEL OHA on September 20, 2024 and sell it today you would earn a total of 34.00 from holding CLEAR CHANNEL OHA or generate 34.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JCDecaux SA vs. CLEAR CHANNEL OHA
Performance |
| Timeline |
| JCDecaux SA |
| CLEAR CHANNEL OHA |
JCDecaux and CLEAR CHANNEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JCDecaux and CLEAR CHANNEL
The main advantage of trading using opposite JCDecaux and CLEAR CHANNEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JCDecaux position performs unexpectedly, CLEAR CHANNEL 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 CLEAR CHANNEL will offset losses from the drop in CLEAR CHANNEL's long position.| JCDecaux vs. KENNAMETAL INC | JCDecaux vs. Jacquet Metal Service | JCDecaux vs. Evolution Mining Limited | JCDecaux vs. SERI INDUSTRIAL EO |
| CLEAR CHANNEL vs. Carsales | CLEAR CHANNEL vs. Park Hotels Resorts | CLEAR CHANNEL vs. CARSALESCOM | CLEAR CHANNEL vs. MIRAMAR HOTEL INV |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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