Correlation Between Interpublic Group and Gannett
Can any of the company-specific risk be diversified away by investing in both Interpublic Group and Gannett 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 Interpublic Group and Gannett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interpublic Group of and Gannett Co, you can compare the effects of market volatilities on Interpublic Group and Gannett 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 Interpublic Group with a short position of Gannett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Gannett.
Diversification Opportunities for Interpublic Group and Gannett
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Interpublic and Gannett is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and Interpublic Group 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 Interpublic Group of are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Interpublic Group i.e., Interpublic Group and Gannett go up and down completely randomly.
Pair Corralation between Interpublic Group and Gannett
Considering the 90-day investment horizon Interpublic Group of is expected to under-perform the Gannett. But the stock apears to be less risky and, when comparing its historical volatility, Interpublic Group of is 2.77 times less risky than Gannett. The stock trades about -0.11 of its potential returns per unit of risk. The Gannett Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 225.00 in Gannett Co on January 20, 2024 and sell it today you would earn a total of 35.00 from holding Gannett Co or generate 15.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Interpublic Group of vs. Gannett Co
Performance |
Timeline |
Interpublic Group |
Gannett |
Interpublic Group and Gannett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Interpublic Group and Gannett
The main advantage of trading using opposite Interpublic Group and Gannett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic Group position performs unexpectedly, Gannett 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 Gannett will offset losses from the drop in Gannett's long position.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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