Correlation Between Interpublic Group and Cardlytics

Can any of the company-specific risk be diversified away by investing in both Interpublic Group and Cardlytics 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 Cardlytics 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 Cardlytics, you can compare the effects of market volatilities on Interpublic Group and Cardlytics 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 Cardlytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Cardlytics.

Diversification Opportunities for Interpublic Group and Cardlytics

-0.19

Correlation Coefficient

Interpublic Group  Cardlytics

Good diversification

The 3 months correlation between Interpublic and Cardlytics is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics 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 Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of Interpublic Group i.e., Interpublic Group and Cardlytics go up and down completely randomly.

Pair Corralation between Interpublic Group and Cardlytics

Considering the 90-day investment horizon Interpublic Group of is expected to under-perform the Cardlytics. But the stock apears to be less risky and, when comparing its historical volatility, Interpublic Group of is 3.1 times less risky than Cardlytics. The stock trades about -0.02 of its potential returns per unit of risk. The Cardlytics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  370.00  in Cardlytics on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Cardlytics or generate 0.0% 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.  Cardlytics

Interpublic Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interpublic Group of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Interpublic Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Cardlytics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cardlytics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Cardlytics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Interpublic Group and Cardlytics

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

The idea behind Interpublic Group of and Cardlytics 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.