Correlation Between Interpublic Group and Deluxe
Can any of the company-specific risk be diversified away by investing in both Interpublic Group and Deluxe 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 Deluxe 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 Deluxe, you can compare the effects of market volatilities on Interpublic Group and Deluxe 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 Deluxe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Deluxe.
Diversification Opportunities for Interpublic Group and Deluxe
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Interpublic and Deluxe is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe 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 Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Interpublic Group i.e., Interpublic Group and Deluxe go up and down completely randomly.
Pair Corralation between Interpublic Group and Deluxe
Considering the 90-day investment horizon Interpublic Group of is expected to under-perform the Deluxe. But the stock apears to be less risky and, when comparing its historical volatility, Interpublic Group of is 1.58 times less risky than Deluxe. The stock trades about -0.06 of its potential returns per unit of risk. The Deluxe is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,862 in Deluxe on August 24, 2024 and sell it today you would earn a total of 433.00 from holding Deluxe or generate 23.25% 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. Deluxe
Performance |
| Timeline |
| Interpublic Group |
| Deluxe |
Interpublic Group and Deluxe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interpublic Group and Deluxe
The main advantage of trading using opposite Interpublic Group and Deluxe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic Group position performs unexpectedly, Deluxe 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 Deluxe will offset losses from the drop in Deluxe'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 |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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