Correlation Between Dupont De and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Publicis Groupe SA, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Publicis Groupe.
Diversification Opportunities for Dupont De and Publicis Groupe
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and Publicis is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours 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 Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and Publicis Groupe go up and down completely randomly.
Pair Corralation between Dupont De and Publicis Groupe
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Publicis Groupe. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.29 times less risky than Publicis Groupe. The stock trades about -0.12 of its potential returns per unit of risk. The Publicis Groupe SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 10,110 in Publicis Groupe SA on August 27, 2024 and sell it today you would lose (70.00) from holding Publicis Groupe SA or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Publicis Groupe SA
Performance |
| Timeline |
| Dupont De Nemours |
| Publicis Groupe SA |
Dupont De and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Publicis Groupe
The main advantage of trading using opposite Dupont De and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Publicis Groupe vs. Media and Games | Publicis Groupe vs. 24SEVENOFFICE GROUP AB | Publicis Groupe vs. Autohome ADR | Publicis Groupe vs. Beazer Homes USA |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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