Correlation Between Ross Stores and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Ross Stores 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 Ross Stores and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Publicis Groupe SA, you can compare the effects of market volatilities on Ross Stores 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 Ross Stores with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Publicis Groupe.
Diversification Opportunities for Ross Stores and Publicis Groupe
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ross and Publicis is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores 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 Ross Stores 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 Ross Stores 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 Ross Stores i.e., Ross Stores and Publicis Groupe go up and down completely randomly.
Pair Corralation between Ross Stores and Publicis Groupe
Given the investment horizon of 90 days Ross Stores is expected to under-perform the Publicis Groupe. In addition to that, Ross Stores is 1.26 times more volatile than Publicis Groupe SA. It trades about -0.27 of its total potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.24 per unit of volatility. If you would invest 10,500 in Publicis Groupe SA on November 28, 2024 and sell it today you would earn a total of 491.00 from holding Publicis Groupe SA or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. Publicis Groupe SA
Performance |
| Timeline |
| Ross Stores |
| Publicis Groupe SA |
Ross Stores and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Publicis Groupe
The main advantage of trading using opposite Ross Stores and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores 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.| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
| Publicis Groupe vs. Luxfer Holdings PLC | Publicis Groupe vs. Cadence Design Systems | Publicis Groupe vs. CF Industries Holdings | Publicis Groupe vs. Ecolab Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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