Correlation Between Modine Manufacturing and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing 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 Modine Manufacturing and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Publicis Groupe SA, you can compare the effects of market volatilities on Modine Manufacturing 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 Modine Manufacturing with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Publicis Groupe.
Diversification Opportunities for Modine Manufacturing and Publicis Groupe
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Modine and Publicis is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing i.e., Modine Manufacturing and Publicis Groupe go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Publicis Groupe
Considering the 90-day investment horizon Modine Manufacturing is expected to generate 4.11 times more return on investment than Publicis Groupe. However, Modine Manufacturing is 4.11 times more volatile than Publicis Groupe SA. It trades about 0.04 of its potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.14 per unit of risk. If you would invest 13,031 in Modine Manufacturing on August 30, 2024 and sell it today you would earn a total of 306.00 from holding Modine Manufacturing or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modine Manufacturing vs. Publicis Groupe SA
Performance |
| Timeline |
| Modine Manufacturing |
| Publicis Groupe SA |
Modine Manufacturing and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and Publicis Groupe
The main advantage of trading using opposite Modine Manufacturing and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing 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.| Modine Manufacturing vs. Ford Motor | Modine Manufacturing vs. General Motors | Modine Manufacturing vs. Goodyear Tire Rubber | Modine Manufacturing vs. Li Auto |
| Publicis Groupe vs. Ross Stores | Publicis Groupe vs. American Axle Manufacturing | Publicis Groupe vs. Modine Manufacturing | Publicis Groupe vs. Wabash National |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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