Correlation Between Ipsos SA and JC Decaux
Can any of the company-specific risk be diversified away by investing in both Ipsos SA and JC Decaux 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 Ipsos SA and JC Decaux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ipsos SA and JC Decaux SA, you can compare the effects of market volatilities on Ipsos SA and JC Decaux 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 Ipsos SA with a short position of JC Decaux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ipsos SA and JC Decaux.
Diversification Opportunities for Ipsos SA and JC Decaux
Very weak diversification
The 3 months correlation between Ipsos and DEC is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ipsos SA and JC Decaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Decaux SA and Ipsos SA 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 Ipsos SA are associated (or correlated) with JC Decaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Decaux SA has no effect on the direction of Ipsos SA i.e., Ipsos SA and JC Decaux go up and down completely randomly.
Pair Corralation between Ipsos SA and JC Decaux
Assuming the 90 days trading horizon Ipsos SA is expected to under-perform the JC Decaux. But the stock apears to be less risky and, when comparing its historical volatility, Ipsos SA is 1.13 times less risky than JC Decaux. The stock trades about -0.14 of its potential returns per unit of risk. The JC Decaux SA is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,576 in JC Decaux SA on November 28, 2024 and sell it today you would lose (43.00) from holding JC Decaux SA or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ipsos SA vs. JC Decaux SA
Performance |
| Timeline |
| Ipsos SA |
| JC Decaux SA |
Ipsos SA and JC Decaux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ipsos SA and JC Decaux
The main advantage of trading using opposite Ipsos SA and JC Decaux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ipsos SA position performs unexpectedly, JC Decaux 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 JC Decaux will offset losses from the drop in JC Decaux's long position.| Ipsos SA vs. Mtropole Tlvision SA | Ipsos SA vs. Alten SA | Ipsos SA vs. Publicis Groupe SA | Ipsos SA vs. Imerys SA |
| JC Decaux vs. Publicis Groupe SA | JC Decaux vs. Lagardere SCA | JC Decaux vs. Sodexo SA | JC Decaux vs. Imerys 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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