Correlation Between Stagwell and 717265AJ1

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Can any of the company-specific risk be diversified away by investing in both Stagwell and 717265AJ1 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 Stagwell and 717265AJ1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and FCX 7125 01 NOV 27, you can compare the effects of market volatilities on Stagwell and 717265AJ1 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 Stagwell with a short position of 717265AJ1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and 717265AJ1.

Diversification Opportunities for Stagwell and 717265AJ1

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Stagwell and 717265AJ1 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and FCX 7125 01 NOV 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FCX 7125 01 and Stagwell 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 Stagwell are associated (or correlated) with 717265AJ1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FCX 7125 01 has no effect on the direction of Stagwell i.e., Stagwell and 717265AJ1 go up and down completely randomly.

Pair Corralation between Stagwell and 717265AJ1

Given the investment horizon of 90 days Stagwell is expected to generate 2.31 times more return on investment than 717265AJ1. However, Stagwell is 2.31 times more volatile than FCX 7125 01 NOV 27. It trades about 0.38 of its potential returns per unit of risk. FCX 7125 01 NOV 27 is currently generating about 0.24 per unit of risk. If you would invest  659.00  in Stagwell on September 5, 2024 and sell it today you would earn a total of  145.00  from holding Stagwell or generate 22.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy13.64%
ValuesDaily Returns

Stagwell  vs.  FCX 7125 01 NOV 27

 Performance 
       Timeline  
Stagwell 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Stagwell are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Stagwell showed solid returns over the last few months and may actually be approaching a breakup point.
FCX 7125 01 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FCX 7125 01 NOV 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 717265AJ1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Stagwell and 717265AJ1 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stagwell and 717265AJ1

The main advantage of trading using opposite Stagwell and 717265AJ1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell position performs unexpectedly, 717265AJ1 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 717265AJ1 will offset losses from the drop in 717265AJ1's long position.
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The idea behind Stagwell and FCX 7125 01 NOV 27 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.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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