Correlation Between Publicis Groupe and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Publicis Groupe and Talanx AG 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 Talanx AG 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 Talanx AG, you can compare the effects of market volatilities on Publicis Groupe and Talanx AG 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 Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Publicis Groupe and Talanx AG.
Diversification Opportunities for Publicis Groupe and Talanx AG
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Publicis and Talanx is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Publicis Groupe SA and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG 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 Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of Publicis Groupe i.e., Publicis Groupe and Talanx AG go up and down completely randomly.
Pair Corralation between Publicis Groupe and Talanx AG
Assuming the 90 days horizon Publicis Groupe is expected to generate 3.71 times less return on investment than Talanx AG. In addition to that, Publicis Groupe is 1.53 times more volatile than Talanx AG. It trades about 0.08 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.43 per unit of volatility. If you would invest 7,040 in Talanx AG on August 31, 2024 and sell it today you would earn a total of 890.00 from holding Talanx AG or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Publicis Groupe SA vs. Talanx AG
Performance |
| Timeline |
| Publicis Groupe SA |
| Talanx AG |
Publicis Groupe and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Publicis Groupe and Talanx AG
The main advantage of trading using opposite Publicis Groupe and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Publicis Groupe position performs unexpectedly, Talanx AG 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 Talanx AG will offset losses from the drop in Talanx AG's long position.| Publicis Groupe vs. Tencent Music Entertainment | Publicis Groupe vs. GigaMedia | Publicis Groupe vs. METHODE ELECTRONICS | Publicis Groupe vs. CNVISION MEDIA |
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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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