Correlation Between Omnicom and 4imprint Group
Can any of the company-specific risk be diversified away by investing in both Omnicom and 4imprint Group 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 Omnicom and 4imprint Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omnicom Group and 4imprint Group plc, you can compare the effects of market volatilities on Omnicom and 4imprint Group 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 Omnicom with a short position of 4imprint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnicom and 4imprint Group.
Diversification Opportunities for Omnicom and 4imprint Group
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omnicom and 4imprint is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Omnicom Group and 4imprint Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4imprint Group plc and Omnicom 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 Omnicom Group are associated (or correlated) with 4imprint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4imprint Group plc has no effect on the direction of Omnicom i.e., Omnicom and 4imprint Group go up and down completely randomly.
Pair Corralation between Omnicom and 4imprint Group
Considering the 90-day investment horizon Omnicom Group is not expected to generate positive returns. However, Omnicom Group is 2.27 times less risky than 4imprint Group. It waists most of its returns potential to compensate for thr risk taken. 4imprint Group is generating about 0.05 per unit of risk. If you would invest 5,996 in 4imprint Group plc on November 27, 2024 and sell it today you would earn a total of 1,137 from holding 4imprint Group plc or generate 18.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.76% |
| Values | Daily Returns |
Omnicom Group vs. 4imprint Group plc
Performance |
| Timeline |
| Omnicom Group |
| 4imprint Group plc |
Omnicom and 4imprint Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omnicom and 4imprint Group
The main advantage of trading using opposite Omnicom and 4imprint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnicom position performs unexpectedly, 4imprint Group 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 4imprint Group will offset losses from the drop in 4imprint Group's long position.The idea behind Omnicom Group and 4imprint Group plc 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.| 4imprint Group vs. Inuvo Inc | 4imprint Group vs. Clubhouse Media Group | 4imprint Group vs. Pervasip Corp | 4imprint Group vs. Mirriad Advertising plc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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