Correlation Between Wabash National and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Wabash National 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 Wabash National and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Publicis Groupe SA, you can compare the effects of market volatilities on Wabash National 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 Wabash National with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Publicis Groupe.
Diversification Opportunities for Wabash National and Publicis Groupe
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wabash and Publicis is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National 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 Wabash National 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 Wabash National 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 Wabash National i.e., Wabash National and Publicis Groupe go up and down completely randomly.
Pair Corralation between Wabash National and Publicis Groupe
Considering the 90-day investment horizon Wabash National is expected to under-perform the Publicis Groupe. In addition to that, Wabash National is 3.3 times more volatile than Publicis Groupe SA. It trades about -0.5 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabash National vs. Publicis Groupe SA
Performance |
| Timeline |
| Wabash National |
| Publicis Groupe SA |
Wabash National and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Publicis Groupe
The main advantage of trading using opposite Wabash National and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National 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.| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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