Correlation Between Nexity and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Nexity 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 Nexity and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexity and Publicis Groupe SA, you can compare the effects of market volatilities on Nexity 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 Nexity with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexity and Publicis Groupe.
Diversification Opportunities for Nexity and Publicis Groupe
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexity and Publicis is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nexity 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 Nexity 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 Nexity 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 Nexity i.e., Nexity and Publicis Groupe go up and down completely randomly.
Pair Corralation between Nexity and Publicis Groupe
Assuming the 90 days trading horizon Nexity is expected to under-perform the Publicis Groupe. In addition to that, Nexity is 2.04 times more volatile than Publicis Groupe SA. It trades about -0.03 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexity vs. Publicis Groupe SA
Performance |
| Timeline |
| Nexity |
| Publicis Groupe SA |
Nexity and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexity and Publicis Groupe
The main advantage of trading using opposite Nexity and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexity 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.The idea behind Nexity and Publicis Groupe SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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