Correlation Between QINGCI GAMES and Omnicom

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

By analyzing existing cross correlation between QINGCI GAMES INC and Omnicom Group, you can compare the effects of market volatilities on QINGCI GAMES and Omnicom 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 QINGCI GAMES with a short position of Omnicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of QINGCI GAMES and Omnicom.

Diversification Opportunities for QINGCI GAMES and Omnicom

-0.7

Correlation Coefficient

QINGCI GAMES  Omnicom

Excellent diversification

The 3 months correlation between QINGCI and Omnicom is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding QINGCI GAMES INC and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group and QINGCI GAMES 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 QINGCI GAMES INC are associated (or correlated) with Omnicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicom Group has no effect on the direction of QINGCI GAMES i.e., QINGCI GAMES and Omnicom go up and down completely randomly.

Pair Corralation between QINGCI GAMES and Omnicom

Assuming the 90 days horizon QINGCI GAMES INC is expected to under-perform the Omnicom. In addition to that, QINGCI GAMES is 2.34 times more volatile than Omnicom Group. It trades about -0.02 of its total potential returns per unit of risk. Omnicom Group is currently generating about 0.01 per unit of volatility. If you would invest  8,249  in Omnicom Group on October 4, 2024 and sell it today you would lose (25.00) from holding Omnicom Group or give up 0.3% of portfolio value over 90 days.

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

QINGCI GAMES INC  vs.  Omnicom Group

QINGCI GAMES INC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in QINGCI GAMES INC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QINGCI GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Omnicom Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omnicom Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with QINGCI GAMES and Omnicom

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

The idea behind QINGCI GAMES INC and Omnicom Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.