Correlation Between Ziff Davis and Omnicom
Can any of the company-specific risk be diversified away by investing in both Ziff Davis and Omnicom 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 Ziff Davis and Omnicom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ziff Davis and Omnicom Group, you can compare the effects of market volatilities on Ziff Davis and Omnicom 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 Ziff Davis with a short position of Omnicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ziff Davis and Omnicom.
Diversification Opportunities for Ziff Davis and Omnicom
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ziff and Omnicom is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ziff Davis and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group and Ziff Davis 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 Ziff Davis are associated (or correlated) with Omnicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicom Group has no effect on the direction of Ziff Davis i.e., Ziff Davis and Omnicom go up and down completely randomly.
Pair Corralation between Ziff Davis and Omnicom
Allowing for the 90-day total investment horizon Ziff Davis is expected to under-perform the Omnicom. In addition to that, Ziff Davis is 1.51 times more volatile than Omnicom Group. It trades about -0.04 of its total potential returns per unit of risk. Omnicom Group is currently generating about 0.03 per unit of volatility. If you would invest 8,621 in Omnicom Group on August 27, 2024 and sell it today you would earn a total of 1,617 from holding Omnicom Group or generate 18.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ziff Davis vs. Omnicom Group
Performance |
| Timeline |
| Ziff Davis |
| Omnicom Group |
Ziff Davis and Omnicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ziff Davis and Omnicom
The main advantage of trading using opposite Ziff Davis and Omnicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ziff Davis position performs unexpectedly, Omnicom 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 Omnicom will offset losses from the drop in Omnicom's long position.| Ziff Davis vs. Interpublic Group of | Ziff Davis vs. Criteo Sa | Ziff Davis vs. WPP PLC ADR | Ziff Davis vs. Integral Ad Science |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |