Correlation Between Mtropole Tlvision and Publicis Groupe

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

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

Diversification Opportunities for Mtropole Tlvision and Publicis Groupe

-0.56

Correlation Coefficient

Mtropole Tlvision  Publicis Groupe

Excellent diversification

The 3 months correlation between Mtropole and Publicis is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mtropole Tlvision SA 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 Mtropole Tlvision 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 Mtropole Tlvision SA 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 Mtropole Tlvision i.e., Mtropole Tlvision and Publicis Groupe go up and down completely randomly.

Pair Corralation between Mtropole Tlvision and Publicis Groupe

Assuming the 90 days trading horizon Mtropole Tlvision SA is expected to under-perform the Publicis Groupe. But the stock apears to be less risky and, when comparing its historical volatility, Mtropole Tlvision SA is 1.24 times less risky than Publicis Groupe. The stock trades about -0.14 of its potential returns per unit of risk. The Publicis Groupe SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  9,820  in Publicis Groupe SA on September 28, 2024 and sell it today you would earn a total of  430.00  from holding Publicis Groupe SA or generate 4.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Mtropole Tlvision SA  vs.  Publicis Groupe SA

Mtropole Tlvision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mtropole Tlvision SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Publicis Groupe SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Publicis Groupe SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Publicis Groupe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mtropole Tlvision and Publicis Groupe

The main advantage of trading using opposite Mtropole Tlvision and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mtropole Tlvision 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 Mtropole Tlvision SA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.