Correlation Between Interpublic Group and Disney
Can any of the company-specific risk be diversified away by investing in both Interpublic Group and Disney 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 Disney 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 Walt Disney, you can compare the effects of market volatilities on Interpublic Group and Disney 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 Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Disney.
Diversification Opportunities for Interpublic Group and Disney
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Interpublic and Disney is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Interpublic Group i.e., Interpublic Group and Disney go up and down completely randomly.
Pair Corralation between Interpublic Group and Disney
Considering the 90-day investment horizon Interpublic Group is expected to generate 10.02 times less return on investment than Disney. But when comparing it to its historical volatility, Interpublic Group of is 1.15 times less risky than Disney. It trades about 0.01 of its potential returns per unit of risk. Walt Disney is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,521 in Walt Disney on September 12, 2024 and sell it today you would earn a total of 2,962 from holding Walt Disney or generate 34.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interpublic Group of vs. Walt Disney
Performance |
| Timeline |
| Interpublic Group |
| Walt Disney |
Interpublic Group and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interpublic Group and Disney
The main advantage of trading using opposite Interpublic Group and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic Group position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney'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 |
| Disney vs. Aeye Inc | Disney vs. Ep Emerging Markets | Disney vs. ALPS Emerging Sector | Disney vs. First Physicians Capital |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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