Correlation Between Deluxe and Stagwell
Can any of the company-specific risk be diversified away by investing in both Deluxe and Stagwell 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 Stagwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Stagwell, you can compare the effects of market volatilities on Deluxe and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Stagwell.
Diversification Opportunities for Deluxe and Stagwell
Poor diversification
The 3 months correlation between Deluxe and Stagwell is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Deluxe i.e., Deluxe and Stagwell go up and down completely randomly.
Pair Corralation between Deluxe and Stagwell
Considering the 90-day investment horizon Deluxe is expected to generate 1.02 times less return on investment than Stagwell. In addition to that, Deluxe is 1.14 times more volatile than Stagwell. It trades about 0.29 of its total potential returns per unit of risk. Stagwell is currently generating about 0.33 per unit of volatility. If you would invest 643.00 in Stagwell on August 23, 2024 and sell it today you would earn a total of 143.00 from holding Stagwell or generate 22.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. Stagwell
Performance |
| Timeline |
| Deluxe |
| Stagwell |
Deluxe and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and Stagwell
The main advantage of trading using opposite Deluxe and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell's long position.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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