Correlation Between Interpublic Group and Gushen

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

Diversification Opportunities for Interpublic Group and Gushen

-0.3

Correlation Coefficient

Interpublic Group  Gushen

Very good diversification

The 3 months correlation between Interpublic and Gushen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of and Gushen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gushen Inc 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 Gushen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gushen Inc has no effect on the direction of Interpublic Group i.e., Interpublic Group and Gushen go up and down completely randomly.

Pair Corralation between Interpublic Group and Gushen

Considering the 90-day investment horizon Interpublic Group of is expected to under-perform the Gushen. In addition to that, Interpublic Group is 1.05 times more volatile than Gushen Inc. It trades about -0.02 of its total potential returns per unit of risk. Gushen Inc is currently generating about 0.01 per unit of volatility. If you would invest  2,265  in Gushen Inc on October 23, 2024 and sell it today you would earn a total of  5.00  from holding Gushen Inc or generate 0.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	22.27%
Values	Daily Returns

Interpublic Group of  vs.  Gushen Inc

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Gushen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gushen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Gushen is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Interpublic Group and Gushen

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

The idea behind Interpublic Group of and Gushen Inc 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.