Correlation Between JC Decaux and Ipsos SA

Can any of the company-specific risk be diversified away by investing in both JC Decaux and Ipsos SA 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 JC Decaux and Ipsos SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for JC Decaux and Ipsos SA

-0.34

Correlation Coefficient

JC Decaux  Ipsos SA

Very good diversification

The 3 months correlation between DEC and Ipsos is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding JC Decaux SA and Ipsos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipsos SA and JC Decaux 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 JC Decaux SA are associated (or correlated) with Ipsos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ipsos SA has no effect on the direction of JC Decaux i.e., JC Decaux and Ipsos SA go up and down completely randomly.

Pair Corralation between JC Decaux and Ipsos SA

Assuming the 90 days trading horizon JC Decaux SA is expected to generate 1.41 times more return on investment than Ipsos SA. However, JC Decaux is 1.41 times more volatile than Ipsos SA. It trades about 0.04 of its potential returns per unit of risk. Ipsos SA is currently generating about -0.06 per unit of risk. If you would invest  1,500  in JC Decaux SA on December 29, 2024 and sell it today you would earn a total of  70.00  from holding JC Decaux SA or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

JC Decaux SA  vs.  Ipsos SA

JC Decaux SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JC Decaux SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, JC Decaux is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ipsos SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ipsos SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ipsos SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JC Decaux and Ipsos SA

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

The idea behind JC Decaux SA and Ipsos 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.