Correlation Between Omnicom and AdTheorent Holding

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

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

Diversification Opportunities for Omnicom and AdTheorent Holding

-0.16

Correlation Coefficient

Omnicom  AdTheorent Holding

Good diversification

The 3 months correlation between Omnicom and AdTheorent is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Omnicom Group and AdTheorent Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdTheorent Holding 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 AdTheorent Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdTheorent Holding has no effect on the direction of Omnicom i.e., Omnicom and AdTheorent Holding go up and down completely randomly.

Pair Corralation between Omnicom and AdTheorent Holding

If you would invest  9,866  in Omnicom Group on September 3, 2024 and sell it today you would earn a total of  616.00  from holding Omnicom Group or generate 6.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Omnicom Group  vs.  AdTheorent Holding

Omnicom Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Omnicom Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, Omnicom may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AdTheorent Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AdTheorent Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, AdTheorent Holding is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Omnicom and AdTheorent Holding

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

The idea behind Omnicom Group and AdTheorent Holding 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.