Correlation Between Omnicom and CuriosityStream

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

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

Diversification Opportunities for Omnicom and CuriosityStream

0.39

Correlation Coefficient

Omnicom  CuriosityStream

Weak diversification

The 3 months correlation between Omnicom and CuriosityStream is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Omnicom Group and CuriosityStream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CuriosityStream and Omnicom 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 Omnicom Group are associated (or correlated) with CuriosityStream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CuriosityStream has no effect on the direction of Omnicom i.e., Omnicom and CuriosityStream go up and down completely randomly.

Pair Corralation between Omnicom and CuriosityStream

Considering the 90-day investment horizon Omnicom is expected to generate 1829.96 times less return on investment than CuriosityStream. But when comparing it to its historical volatility, Omnicom Group is 78.25 times less risky than CuriosityStream. It trades about 0.0 of its potential returns per unit of risk. CuriosityStream is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  12.00  in CuriosityStream on October 6, 2024 and sell it today you would lose (9.40) from holding CuriosityStream or give up 78.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	80.42%
Values	Daily Returns

Omnicom Group  vs.  CuriosityStream

Omnicom Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omnicom Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CuriosityStream

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CuriosityStream are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, CuriosityStream showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Omnicom and CuriosityStream

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

The idea behind Omnicom Group and CuriosityStream 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.