Correlation Between Deluxe and Interpublic Group
Can any of the company-specific risk be diversified away by investing in both Deluxe and Interpublic Group 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 Deluxe and Interpublic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Interpublic Group of, you can compare the effects of market volatilities on Deluxe and Interpublic Group 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 Deluxe with a short position of Interpublic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Interpublic Group.
Diversification Opportunities for Deluxe and Interpublic Group
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deluxe and Interpublic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Interpublic Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpublic Group and Deluxe 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 Deluxe are associated (or correlated) with Interpublic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpublic Group has no effect on the direction of Deluxe i.e., Deluxe and Interpublic Group go up and down completely randomly.
Pair Corralation between Deluxe and Interpublic Group
Considering the 90-day investment horizon Deluxe is expected to generate 1.42 times more return on investment than Interpublic Group. However, Deluxe is 1.42 times more volatile than Interpublic Group of. It trades about 0.34 of its potential returns per unit of risk. Interpublic Group of is currently generating about 0.04 per unit of risk. If you would invest 1,892 in Deluxe on August 28, 2024 and sell it today you would earn a total of 451.00 from holding Deluxe or generate 23.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. Interpublic Group of
Performance |
| Timeline |
| Deluxe |
| Interpublic Group |
Deluxe and Interpublic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and Interpublic Group
The main advantage of trading using opposite Deluxe and Interpublic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe position performs unexpectedly, Interpublic Group 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 Interpublic Group will offset losses from the drop in Interpublic Group's long position.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
| Interpublic Group vs. Ziff Davis | Interpublic Group vs. Criteo Sa | Interpublic Group vs. WPP PLC ADR | Interpublic Group vs. Integral Ad Science |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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