Correlation Between Identiv and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Identiv 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 Identiv and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Publicis Groupe SA, you can compare the effects of market volatilities on Identiv 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 Identiv with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Publicis Groupe.
Diversification Opportunities for Identiv and Publicis Groupe
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Identiv and Publicis is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Identiv 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 Identiv 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 Identiv 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 Identiv i.e., Identiv and Publicis Groupe go up and down completely randomly.
Pair Corralation between Identiv and Publicis Groupe
Assuming the 90 days trading horizon Identiv is expected to generate 1.73 times more return on investment than Publicis Groupe. However, Identiv is 1.73 times more volatile than Publicis Groupe SA. It trades about 0.12 of its potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.03 per unit of risk. If you would invest 297.00 in Identiv on September 2, 2024 and sell it today you would earn a total of 63.00 from holding Identiv or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. Publicis Groupe SA
Performance |
| Timeline |
| Identiv |
| Publicis Groupe SA |
Identiv and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Publicis Groupe
The main advantage of trading using opposite Identiv and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv 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.| Identiv vs. SBA Communications Corp | Identiv vs. Verizon Communications | Identiv vs. Iridium Communications | Identiv vs. THORNEY TECHS LTD |
| Publicis Groupe vs. WPP PLC ADR | Publicis Groupe vs. Superior Plus Corp | Publicis Groupe vs. NMI Holdings | Publicis Groupe vs. Origin Agritech |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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