Correlation Between Interpublic and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Interpublic 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 Interpublic and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Interpublic Group and Publicis Groupe SA, you can compare the effects of market volatilities on Interpublic 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 Interpublic with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic and Publicis Groupe.
Diversification Opportunities for Interpublic and Publicis Groupe
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Interpublic and Publicis is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding The Interpublic Group 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 Interpublic 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 The Interpublic Group 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 Interpublic i.e., Interpublic and Publicis Groupe go up and down completely randomly.
Pair Corralation between Interpublic and Publicis Groupe
Assuming the 90 days horizon The Interpublic Group is expected to generate 1.05 times more return on investment than Publicis Groupe. However, Interpublic is 1.05 times more volatile than Publicis Groupe SA. It trades about 0.02 of its potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.01 per unit of risk. If you would invest 2,773 in The Interpublic Group on September 2, 2024 and sell it today you would earn a total of 92.00 from holding The Interpublic Group or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Interpublic Group vs. Publicis Groupe SA
Performance |
| Timeline |
| Interpublic Group |
| Publicis Groupe SA |
Interpublic and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interpublic and Publicis Groupe
The main advantage of trading using opposite Interpublic and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic 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.| Interpublic vs. Publicis Groupe SA | Interpublic vs. WPP PLC ADR | Interpublic vs. Superior Plus Corp | Interpublic vs. NMI Holdings |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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