Correlation Between Brinks and Criteo Sa
Can any of the company-specific risk be diversified away by investing in both Brinks and Criteo Sa 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 Brinks and Criteo Sa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinks Company and Criteo Sa, you can compare the effects of market volatilities on Brinks and Criteo Sa 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 Brinks with a short position of Criteo Sa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinks and Criteo Sa.
Diversification Opportunities for Brinks and Criteo Sa
Good diversification
The 3 months correlation between Brinks and Criteo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and Criteo Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Criteo Sa and Brinks 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 Brinks Company are associated (or correlated) with Criteo Sa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Criteo Sa has no effect on the direction of Brinks i.e., Brinks and Criteo Sa go up and down completely randomly.
Pair Corralation between Brinks and Criteo Sa
Considering the 90-day investment horizon Brinks Company is expected to under-perform the Criteo Sa. But the stock apears to be less risky and, when comparing its historical volatility, Brinks Company is 1.1 times less risky than Criteo Sa. The stock trades about -0.05 of its potential returns per unit of risk. The Criteo Sa is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4,193 in Criteo Sa on October 5, 2024 and sell it today you would lose (63.00) from holding Criteo Sa or give up 1.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Brinks Company vs. Criteo Sa
Performance |
Timeline |
Brinks Company |
Criteo Sa |
Brinks and Criteo Sa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brinks and Criteo Sa
The main advantage of trading using opposite Brinks and Criteo Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinks position performs unexpectedly, Criteo Sa 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 Criteo Sa will offset losses from the drop in Criteo Sa's long position.Brinks vs. MSA Safety | Brinks vs. Resideo Technologies | Brinks vs. Mistras Group | Brinks vs. NL Industries |
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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 Stocks Directory module to find actively traded stocks across global markets.
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