Correlation Between Interpublic Group and Mirriad Advertising
Can any of the company-specific risk be diversified away by investing in both Interpublic Group and Mirriad Advertising 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 Mirriad Advertising 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 Mirriad Advertising plc, you can compare the effects of market volatilities on Interpublic Group and Mirriad Advertising 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 Mirriad Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Mirriad Advertising.
Diversification Opportunities for Interpublic Group and Mirriad Advertising
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Interpublic and Mirriad is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Mirriad Advertising plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirriad Advertising plc 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 Mirriad Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirriad Advertising plc has no effect on the direction of Interpublic Group i.e., Interpublic Group and Mirriad Advertising go up and down completely randomly.
Pair Corralation between Interpublic Group and Mirriad Advertising
Considering the 90-day investment horizon Interpublic Group of is expected to generate 0.19 times more return on investment than Mirriad Advertising. However, Interpublic Group of is 5.24 times less risky than Mirriad Advertising. It trades about -0.06 of its potential returns per unit of risk. Mirriad Advertising plc is currently generating about -0.21 per unit of risk. If you would invest 3,004 in Interpublic Group of on August 24, 2024 and sell it today you would lose (89.00) from holding Interpublic Group of or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interpublic Group of vs. Mirriad Advertising plc
Performance |
| Timeline |
| Interpublic Group |
| Mirriad Advertising plc |
Interpublic Group and Mirriad Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interpublic Group and Mirriad Advertising
The main advantage of trading using opposite Interpublic Group and Mirriad Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic Group position performs unexpectedly, Mirriad Advertising 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 Mirriad Advertising will offset losses from the drop in Mirriad Advertising'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 |
| Mirriad Advertising vs. Marchex | Mirriad Advertising vs. Snipp Interactive | Mirriad Advertising vs. Emerald Expositions Events |
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 Stocks Directory module to find actively traded stocks across global markets.
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