Correlation Between Publicis Groupe and Network CN

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

Diversification Opportunities for Publicis Groupe and Network CN

0.0

Correlation Coefficient

Publicis Groupe  Network CN

Pay attention - limited upside

The 3 months correlation between Publicis and Network is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Publicis Groupe SA and Network CN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network CN 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 Network CN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network CN has no effect on the direction of Publicis Groupe i.e., Publicis Groupe and Network CN go up and down completely randomly.

Pair Corralation between Publicis Groupe and Network CN

If you would invest  4.21  in Network CN on December 29, 2024 and sell it today you would earn a total of  21.79  from holding Network CN or generate 517.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Publicis Groupe SA  vs.  Network CN

Publicis Groupe SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Publicis Groupe SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Publicis Groupe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Network CN

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Network CN are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Network CN displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Publicis Groupe and Network CN

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

The idea behind Publicis Groupe SA and Network CN 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.