Correlation Between Omnicom and Interpublic Group
Can any of the company-specific risk be diversified away by investing in both Omnicom and Interpublic Group 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 Omnicom and Interpublic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omnicom Group and Interpublic Group of, you can compare the effects of market volatilities on Omnicom and Interpublic Group 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 Omnicom with a short position of Interpublic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnicom and Interpublic Group.
Diversification Opportunities for Omnicom and Interpublic Group
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Omnicom and Interpublic is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Omnicom Group and Interpublic Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpublic Group and Omnicom 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 Omnicom Group are associated (or correlated) with Interpublic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpublic Group has no effect on the direction of Omnicom i.e., Omnicom and Interpublic Group go up and down completely randomly.
Pair Corralation between Omnicom and Interpublic Group
Considering the 90-day investment horizon Omnicom Group is expected to generate 0.96 times more return on investment than Interpublic Group. However, Omnicom Group is 1.04 times less risky than Interpublic Group. It trades about 0.08 of its potential returns per unit of risk. Interpublic Group of is currently generating about -0.03 per unit of risk. If you would invest 8,848 in Omnicom Group on January 24, 2024 and sell it today you would earn a total of 574.00 from holding Omnicom Group or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omnicom Group vs. Interpublic Group of
Performance |
| Timeline |
| Omnicom Group |
| Interpublic Group |
Omnicom and Interpublic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omnicom and Interpublic Group
The main advantage of trading using opposite Omnicom and Interpublic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnicom position performs unexpectedly, Interpublic Group 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 Interpublic Group will offset losses from the drop in Interpublic Group's long position.| Omnicom vs. MGO Global Common | Omnicom vs. Baosheng Media Group | Omnicom vs. Glory Star New | Omnicom vs. Impact Fusion International |
| Interpublic Group vs. MGO Global Common | Interpublic Group vs. Baosheng Media Group | Interpublic Group vs. Glory Star New | Interpublic Group vs. Impact Fusion International |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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