Correlation Between Interpublic and JCDecaux

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

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

Diversification Opportunities for Interpublic and JCDecaux

-0.18

Correlation Coefficient

Interpublic  JCDecaux

Good diversification

The 3 months correlation between Interpublic and JCDecaux is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Interpublic Group and JCDecaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCDecaux SA and Interpublic 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 The Interpublic Group are associated (or correlated) with JCDecaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCDecaux SA has no effect on the direction of Interpublic i.e., Interpublic and JCDecaux go up and down completely randomly.

Pair Corralation between Interpublic and JCDecaux

Assuming the 90 days horizon The Interpublic Group is expected to under-perform the JCDecaux. In addition to that, Interpublic is 1.02 times more volatile than JCDecaux SA. It trades about -0.01 of its total potential returns per unit of risk. JCDecaux SA is currently generating about 0.04 per unit of volatility. If you would invest  1,469  in JCDecaux SA on April 23, 2025 and sell it today you would earn a total of  60.00  from holding JCDecaux SA or generate 4.08% return on investment over 90 days.

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

The Interpublic Group  vs.  JCDecaux SA

Interpublic Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Interpublic Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Interpublic is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

JCDecaux SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JCDecaux SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, JCDecaux is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Interpublic and JCDecaux

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

The idea behind The Interpublic Group and JCDecaux 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.