Correlation Between Interpublic Group and Stagwell
Can any of the company-specific risk be diversified away by investing in both Interpublic Group and Stagwell 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 Stagwell 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 Stagwell, you can compare the effects of market volatilities on Interpublic Group and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Stagwell.
Diversification Opportunities for Interpublic Group and Stagwell
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Interpublic and Stagwell is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Interpublic Group i.e., Interpublic Group and Stagwell go up and down completely randomly.
Pair Corralation between Interpublic Group and Stagwell
Considering the 90-day investment horizon Interpublic Group of is expected to under-perform the Stagwell. But the stock apears to be less risky and, when comparing its historical volatility, Interpublic Group of is 1.3 times less risky than Stagwell. The stock trades about -0.01 of its potential returns per unit of risk. The Stagwell is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 615.00 in Stagwell on August 26, 2024 and sell it today you would earn a total of 167.00 from holding Stagwell or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interpublic Group of vs. Stagwell
Performance |
| Timeline |
| Interpublic Group |
| Stagwell |
Interpublic Group and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interpublic Group and Stagwell
The main advantage of trading using opposite Interpublic Group and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic Group position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell'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 |
| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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