Correlation Between Starwin Media and Publicis Groupe

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

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

Diversification Opportunities for Starwin Media and Publicis Groupe

0.0

Correlation Coefficient

Starwin Media  Publicis Groupe

Pay attention - limited upside

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

Pair Corralation between Starwin Media and Publicis Groupe

Given the investment horizon of 90 days Starwin Media Holdings is expected to generate 5.86 times more return on investment than Publicis Groupe. However, Starwin Media is 5.86 times more volatile than Publicis Groupe SA. It trades about 0.05 of its potential returns per unit of risk. Publicis Groupe SA is currently generating about 0.03 per unit of risk. If you would invest  0.01  in Starwin Media Holdings on October 26, 2024 and sell it today you would earn a total of  0.01  from holding Starwin Media Holdings or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Starwin Media Holdings  vs.  Publicis Groupe SA

Starwin Media Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Starwin Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Starwin Media is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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

Pair Trading with Starwin Media and Publicis Groupe

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

The idea behind Starwin Media Holdings and Publicis Groupe SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.