Correlation Between Marchex and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Marchex and Publicis Groupe 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 Marchex and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Publicis Groupe SA, you can compare the effects of market volatilities on Marchex and Publicis Groupe 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 Marchex with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Publicis Groupe.
Diversification Opportunities for Marchex and Publicis Groupe
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marchex and Publicis is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Publicis Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Publicis Groupe SA and Marchex 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 Marchex are associated (or correlated) with Publicis Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Publicis Groupe SA has no effect on the direction of Marchex i.e., Marchex and Publicis Groupe go up and down completely randomly.
Pair Corralation between Marchex and Publicis Groupe
Given the investment horizon of 90 days Marchex is expected to generate 2.4 times more return on investment than Publicis Groupe. However, Marchex is 2.4 times more volatile than Publicis Groupe SA. It trades about 0.03 of its potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.07 per unit of risk. If you would invest 150.00 in Marchex on August 26, 2024 and sell it today you would earn a total of 15.00 from holding Marchex or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marchex vs. Publicis Groupe SA
Performance |
| Timeline |
| Marchex |
| Publicis Groupe SA |
Marchex and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Publicis Groupe
The main advantage of trading using opposite Marchex and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Publicis Groupe 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 Publicis Groupe will offset losses from the drop in Publicis Groupe's long position.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| Publicis Groupe vs. Marchex | Publicis Groupe vs. Snipp Interactive | Publicis Groupe 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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