Correlation Between Interpublic Group and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Interpublic Group and Cumulus Media 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 Group and Cumulus Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interpublic Group of and Cumulus Media Class, you can compare the effects of market volatilities on Interpublic Group and Cumulus Media 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 Group with a short position of Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Cumulus Media.
Diversification Opportunities for Interpublic Group and Cumulus Media
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Interpublic and Cumulus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class and Interpublic Group 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 Interpublic Group of are associated (or correlated) with Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Interpublic Group i.e., Interpublic Group and Cumulus Media go up and down completely randomly.
Pair Corralation between Interpublic Group and Cumulus Media
Considering the 90-day investment horizon Interpublic Group of is expected to generate 0.38 times more return on investment than Cumulus Media. However, Interpublic Group of is 2.66 times less risky than Cumulus Media. It trades about 0.0 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.09 per unit of risk. If you would invest 3,086 in Interpublic Group of on August 24, 2024 and sell it today you would lose (171.00) from holding Interpublic Group of or give up 5.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interpublic Group of vs. Cumulus Media Class
Performance |
| Timeline |
| Interpublic Group |
| Cumulus Media Class |
Interpublic Group and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interpublic Group and Cumulus Media
The main advantage of trading using opposite Interpublic Group and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic Group position performs unexpectedly, Cumulus Media 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 Cumulus Media will offset losses from the drop in Cumulus Media's long position.| Interpublic Group vs. Ziff Davis | Interpublic Group vs. Criteo Sa | Interpublic Group vs. WPP PLC ADR | Interpublic Group vs. Integral Ad Science |
| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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