Correlation Between Beyond Commerce and Omnicom

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

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

Diversification Opportunities for Beyond Commerce and Omnicom

-0.15

Correlation Coefficient

Beyond Commerce  Omnicom

Good diversification

The 3 months correlation between Beyond and Omnicom is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Commerce and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group and Beyond Commerce 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 Beyond Commerce 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 Beyond Commerce i.e., Beyond Commerce and Omnicom go up and down completely randomly.

Pair Corralation between Beyond Commerce and Omnicom

Given the investment horizon of 90 days Beyond Commerce is expected to generate 25.74 times more return on investment than Omnicom. However, Beyond Commerce is 25.74 times more volatile than Omnicom Group. It trades about 0.21 of its potential returns per unit of risk. Omnicom Group is currently generating about -0.12 per unit of risk. If you would invest  0.02  in Beyond Commerce on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Beyond Commerce or generate 0.0% return on investment over 90 days.

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

Beyond Commerce  vs.  Omnicom Group

Beyond Commerce

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Commerce are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Beyond Commerce exhibited 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. In spite of uncertain performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Beyond Commerce and Omnicom

The main advantage of trading using opposite Beyond Commerce and Omnicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Commerce 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 Beyond Commerce 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.