Correlation Between Publicis Groupe and S4 Capital

Can any of the company-specific risk be diversified away by investing in both Publicis Groupe and S4 Capital 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 Publicis Groupe and S4 Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Publicis Groupe SA and S4 Capital plc, you can compare the effects of market volatilities on Publicis Groupe and S4 Capital 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 Publicis Groupe with a short position of S4 Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Publicis Groupe and S4 Capital.

Diversification Opportunities for Publicis Groupe and S4 Capital

0.47

Correlation Coefficient

Publicis Groupe  S4 Capital

Very weak diversification

The 3 months correlation between Publicis and SCPPF is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Publicis Groupe SA and S4 Capital plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S4 Capital plc and Publicis Groupe 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 Publicis Groupe SA are associated (or correlated) with S4 Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S4 Capital plc has no effect on the direction of Publicis Groupe i.e., Publicis Groupe and S4 Capital go up and down completely randomly.

Pair Corralation between Publicis Groupe and S4 Capital

If you would invest  51.00  in S4 Capital plc on January 25, 2024 and sell it today you would earn a total of  19.00  from holding S4 Capital plc or generate 37.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

Publicis Groupe SA  vs.  S4 Capital plc

Publicis Groupe SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Publicis Groupe SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Publicis Groupe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

S4 Capital plc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in S4 Capital plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, S4 Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Publicis Groupe and S4 Capital

The main advantage of trading using opposite Publicis Groupe and S4 Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Publicis Groupe position performs unexpectedly, S4 Capital 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 S4 Capital will offset losses from the drop in S4 Capital's long position.

The idea behind Publicis Groupe SA and S4 Capital plc 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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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.