Correlation Between 03027XBM1 and Interpublic Group

Can any of the company-specific risk be diversified away by investing in both 03027XBM1 and Interpublic Group 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 03027XBM1 and Interpublic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMT 27 15 APR 31 and Interpublic Group of, you can compare the effects of market volatilities on 03027XBM1 and Interpublic Group 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 03027XBM1 with a short position of Interpublic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of 03027XBM1 and Interpublic Group.

Diversification Opportunities for 03027XBM1 and Interpublic Group

0.48

Correlation Coefficient

03027XBM1  Interpublic Group

Very weak diversification

The 3 months correlation between 03027XBM1 and Interpublic is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding AMT 27 15 APR 31 and Interpublic Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpublic Group and 03027XBM1 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 AMT 27 15 APR 31 are associated (or correlated) with Interpublic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpublic Group has no effect on the direction of 03027XBM1 i.e., 03027XBM1 and Interpublic Group go up and down completely randomly.

Pair Corralation between 03027XBM1 and Interpublic Group

Assuming the 90 days trading horizon AMT 27 15 APR 31 is expected to under-perform the Interpublic Group. But the bond apears to be less risky and, when comparing its historical volatility, AMT 27 15 APR 31 is 1.81 times less risky than Interpublic Group. The bond trades about -0.09 of its potential returns per unit of risk. The Interpublic Group of is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,992  in Interpublic Group of on October 26, 2024 and sell it today you would lose (165.00) from holding Interpublic Group of or give up 5.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.72%
Values	Daily Returns

AMT 27 15 APR 31  vs.  Interpublic Group of

AMT 27 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMT 27 15 APR 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 03027XBM1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Interpublic Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with 03027XBM1 and Interpublic Group

The main advantage of trading using opposite 03027XBM1 and Interpublic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 03027XBM1 position performs unexpectedly, Interpublic Group 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 Interpublic Group will offset losses from the drop in Interpublic Group's long position.

The idea behind AMT 27 15 APR 31 and Interpublic Group of 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.