Correlation Between Lagardere SCA and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Lagardere SCA 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 Lagardere SCA and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lagardere SCA and Publicis Groupe SA, you can compare the effects of market volatilities on Lagardere SCA 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 Lagardere SCA with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagardere SCA and Publicis Groupe.
Diversification Opportunities for Lagardere SCA and Publicis Groupe
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lagardere and Publicis is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lagardere SCA 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 Lagardere SCA 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 Lagardere SCA 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 Lagardere SCA i.e., Lagardere SCA and Publicis Groupe go up and down completely randomly.
Pair Corralation between Lagardere SCA and Publicis Groupe
Assuming the 90 days trading horizon Lagardere SCA is expected to generate 3.63 times less return on investment than Publicis Groupe. In addition to that, Lagardere SCA is 1.04 times more volatile than Publicis Groupe SA. It trades about 0.02 of its total potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.09 per unit of volatility. If you would invest 5,625 in Publicis Groupe SA on September 2, 2024 and sell it today you would earn a total of 4,645 from holding Publicis Groupe SA or generate 82.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lagardere SCA vs. Publicis Groupe SA
Performance |
| Timeline |
| Lagardere SCA |
| Publicis Groupe SA |
Lagardere SCA and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lagardere SCA and Publicis Groupe
The main advantage of trading using opposite Lagardere SCA and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lagardere SCA 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.| Lagardere SCA vs. Television Francaise 1 | Lagardere SCA vs. Publicis Groupe SA | Lagardere SCA vs. Bouygues SA | Lagardere SCA vs. Accor S A |
| Publicis Groupe vs. Bouygues SA | Publicis Groupe vs. Legrand SA | Publicis Groupe vs. Sodexo SA | Publicis Groupe vs. Compagnie de Saint Gobain |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |