Correlation Between Omnicom and TRADEDOUBLER
Can any of the company-specific risk be diversified away by investing in both Omnicom and TRADEDOUBLER 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 Omnicom and TRADEDOUBLER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omnicom Group and TRADEDOUBLER AB SK, you can compare the effects of market volatilities on Omnicom and TRADEDOUBLER 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 Omnicom with a short position of TRADEDOUBLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnicom and TRADEDOUBLER.
Diversification Opportunities for Omnicom and TRADEDOUBLER
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Omnicom and TRADEDOUBLER is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Omnicom Group and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK and Omnicom 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 Omnicom Group are associated (or correlated) with TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Omnicom i.e., Omnicom and TRADEDOUBLER go up and down completely randomly.
Pair Corralation between Omnicom and TRADEDOUBLER
Assuming the 90 days horizon Omnicom Group is expected to under-perform the TRADEDOUBLER. But the stock apears to be less risky and, when comparing its historical volatility, Omnicom Group is 1.96 times less risky than TRADEDOUBLER. The stock trades about -0.06 of its potential returns per unit of risk. The TRADEDOUBLER AB SK is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 25.00 in TRADEDOUBLER AB SK on September 25, 2024 and sell it today you would earn a total of 3.00 from holding TRADEDOUBLER AB SK or generate 12.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Omnicom Group vs. TRADEDOUBLER AB SK
Performance |
Timeline |
Omnicom Group |
TRADEDOUBLER AB SK |
Omnicom and TRADEDOUBLER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Omnicom and TRADEDOUBLER
The main advantage of trading using opposite Omnicom and TRADEDOUBLER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnicom position performs unexpectedly, TRADEDOUBLER 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 TRADEDOUBLER will offset losses from the drop in TRADEDOUBLER's long position.The idea behind Omnicom Group and TRADEDOUBLER AB SK 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.TRADEDOUBLER vs. Publicis Groupe SA | TRADEDOUBLER vs. Omnicom Group | TRADEDOUBLER vs. WPP PLC | TRADEDOUBLER vs. WPP PLC ADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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