Correlation Between Stagwell and Publicis Groupe

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Stagwell 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 Stagwell and Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and Publicis Groupe SA, you can compare the effects of market volatilities on Stagwell 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 Stagwell with a short position of Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and Publicis Groupe.

Diversification Opportunities for Stagwell and Publicis Groupe

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Stagwell and Publicis is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell 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 Stagwell 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 Stagwell 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 Stagwell i.e., Stagwell and Publicis Groupe go up and down completely randomly.

Pair Corralation between Stagwell and Publicis Groupe

Given the investment horizon of 90 days Stagwell is expected to generate 2.6 times less return on investment than Publicis Groupe. In addition to that, Stagwell is 2.04 times more volatile than Publicis Groupe SA. It trades about 0.01 of its total potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.07 per unit of volatility. If you would invest  1,357  in Publicis Groupe SA on December 29, 2023 and sell it today you would earn a total of  766.00  from holding Publicis Groupe SA or generate 56.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy83.81%
ValuesDaily Returns

Stagwell  vs.  Publicis Groupe SA

 Performance 
       Timeline  
Stagwell 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Stagwell is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Publicis Groupe SA 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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.

Stagwell and Publicis Groupe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stagwell and Publicis Groupe

The main advantage of trading using opposite Stagwell and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell 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.
The idea behind Stagwell and Publicis Groupe SA 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.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

Other Complementary Tools

Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes