Correlation Between Publicis Groupe and Identiv
Can any of the company-specific risk be diversified away by investing in both Publicis Groupe and Identiv 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 Publicis Groupe and Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Publicis Groupe SA and Identiv, you can compare the effects of market volatilities on Publicis Groupe and Identiv 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 Publicis Groupe with a short position of Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Publicis Groupe and Identiv.
Diversification Opportunities for Publicis Groupe and Identiv
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Publicis and Identiv is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Publicis Groupe SA and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv and Publicis Groupe 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 Publicis Groupe SA are associated (or correlated) with Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Publicis Groupe i.e., Publicis Groupe and Identiv go up and down completely randomly.
Pair Corralation between Publicis Groupe and Identiv
Assuming the 90 days horizon Publicis Groupe is expected to generate 6.98 times less return on investment than Identiv. But when comparing it to its historical volatility, Publicis Groupe SA is 1.73 times less risky than Identiv. It trades about 0.03 of its potential returns per unit of risk. Identiv is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Identiv on September 2, 2024 and sell it today you would earn a total of 63.00 from holding Identiv or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Publicis Groupe SA vs. Identiv
Performance |
| Timeline |
| Publicis Groupe SA |
| Identiv |
Publicis Groupe and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Publicis Groupe and Identiv
The main advantage of trading using opposite Publicis Groupe and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Publicis Groupe position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| Publicis Groupe vs. WPP PLC ADR | Publicis Groupe vs. Superior Plus Corp | Publicis Groupe vs. NMI Holdings | Publicis Groupe vs. Origin Agritech |
| Identiv vs. SBA Communications Corp | Identiv vs. Verizon Communications | Identiv vs. Iridium Communications | Identiv vs. THORNEY TECHS LTD |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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