Correlation Between Publicis Groupe and Tremor International

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

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

Diversification Opportunities for Publicis Groupe and Tremor International

0.16

Correlation Coefficient

Publicis Groupe  Tremor International

Average diversification

The 3 months correlation between Publicis and Tremor is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Publicis Groupe SA and Tremor International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tremor International and Publicis Groupe 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 Publicis Groupe SA are associated (or correlated) with Tremor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tremor International has no effect on the direction of Publicis Groupe i.e., Publicis Groupe and Tremor International go up and down completely randomly.

Pair Corralation between Publicis Groupe and Tremor International

Assuming the 90 days horizon Publicis Groupe SA is expected to under-perform the Tremor International. But the otc stock apears to be less risky and, when comparing its historical volatility, Publicis Groupe SA is 1.49 times less risky than Tremor International. The otc stock trades about -0.22 of its potential returns per unit of risk. The Tremor International is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  490.00  in Tremor International on October 11, 2024 and sell it today you would earn a total of  50.00  from holding Tremor International or generate 10.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Publicis Groupe SA  vs.  Tremor International

Publicis Groupe SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tremor International

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tremor International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Tremor International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Publicis Groupe and Tremor International

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

The idea behind Publicis Groupe SA and Tremor International 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.