Correlation Between JC Decaux and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both JC Decaux 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 JC Decaux and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JC Decaux SA and Publicis Groupe SA, you can compare the effects of market volatilities on JC Decaux 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 JC Decaux with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Decaux and Publicis Groupe.
Diversification Opportunities for JC Decaux and Publicis Groupe
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DEC and Publicis is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding JC Decaux SA 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 JC Decaux 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 JC Decaux SA 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 JC Decaux i.e., JC Decaux and Publicis Groupe go up and down completely randomly.
Pair Corralation between JC Decaux and Publicis Groupe
Assuming the 90 days trading horizon JC Decaux SA is expected to under-perform the Publicis Groupe. But the stock apears to be less risky and, when comparing its historical volatility, JC Decaux SA is 1.16 times less risky than Publicis Groupe. The stock trades about -0.11 of its potential returns per unit of risk. The Publicis Groupe SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,085 in Publicis Groupe SA on November 28, 2024 and sell it today you would earn a total of 35.00 from holding Publicis Groupe SA or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Decaux SA vs. Publicis Groupe SA
Performance |
| Timeline |
| JC Decaux SA |
| Publicis Groupe SA |
JC Decaux and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Decaux and Publicis Groupe
The main advantage of trading using opposite JC Decaux and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Decaux 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.| JC Decaux vs. Publicis Groupe SA | JC Decaux vs. Lagardere SCA | JC Decaux vs. Sodexo SA | JC Decaux vs. Imerys 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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