Correlation Between Publicis Groupe and Theglobe

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

Diversification Opportunities for Publicis Groupe and Theglobe

-0.74

Correlation Coefficient

Publicis Groupe  Theglobe

Pay attention - limited upside

The 3 months correlation between Publicis and Theglobe is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Publicis Groupe SA and theglobe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on theglobe 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 Theglobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of theglobe has no effect on the direction of Publicis Groupe i.e., Publicis Groupe and Theglobe go up and down completely randomly.

Pair Corralation between Publicis Groupe and Theglobe

If you would invest  23.00  in theglobe on September 30, 2024 and sell it today you would earn a total of  0.00  from holding theglobe or generate 0.0% return on investment over 90 days.

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

Publicis Groupe SA  vs.  theglobe

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. 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.

theglobe

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Publicis Groupe and Theglobe

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

The idea behind Publicis Groupe SA and theglobe 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.