Correlation Between Compagnie and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Compagnie 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 Compagnie and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Saint Gobain and Publicis Groupe SA, you can compare the effects of market volatilities on Compagnie 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 Compagnie with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Publicis Groupe.
Diversification Opportunities for Compagnie and Publicis Groupe
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compagnie and Publicis is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain 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 Compagnie 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 Compagnie de Saint Gobain 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 Compagnie i.e., Compagnie and Publicis Groupe go up and down completely randomly.
Pair Corralation between Compagnie and Publicis Groupe
Assuming the 90 days trading horizon Compagnie de Saint Gobain is expected to generate 0.83 times more return on investment than Publicis Groupe. However, Compagnie de Saint Gobain is 1.2 times less risky than Publicis Groupe. It trades about 0.16 of its potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.04 per unit of risk. If you would invest 8,304 in Compagnie de Saint Gobain on August 28, 2024 and sell it today you would earn a total of 444.00 from holding Compagnie de Saint Gobain or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Publicis Groupe SA
Performance |
| Timeline |
| Compagnie de Saint |
| Publicis Groupe SA |
Compagnie and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Publicis Groupe
The main advantage of trading using opposite Compagnie and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie 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.| Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
| Publicis Groupe vs. Streamwide | Publicis Groupe vs. Claranova SE | Publicis Groupe vs. SA Catana Group | Publicis Groupe vs. Manitou BF SA |
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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