Correlation Between Criteo Sa and Mirriad Advertising

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

By analyzing existing cross correlation between Criteo Sa and Mirriad Advertising plc, you can compare the effects of market volatilities on Criteo Sa and Mirriad Advertising 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 Criteo Sa with a short position of Mirriad Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Criteo Sa and Mirriad Advertising.

Diversification Opportunities for Criteo Sa and Mirriad Advertising

-0.48

Correlation Coefficient

Criteo Sa  Mirriad Advertising

Very good diversification

The 3 months correlation between Criteo and Mirriad is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Criteo Sa and Mirriad Advertising plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirriad Advertising plc and Criteo Sa 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 Criteo Sa are associated (or correlated) with Mirriad Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirriad Advertising plc has no effect on the direction of Criteo Sa i.e., Criteo Sa and Mirriad Advertising go up and down completely randomly.

Pair Corralation between Criteo Sa and Mirriad Advertising

Given the investment horizon of 90 days Criteo Sa is expected to under-perform the Mirriad Advertising. But the stock apears to be less risky and, when comparing its historical volatility, Criteo Sa is 6.85 times less risky than Mirriad Advertising. The stock trades about -0.02 of its potential returns per unit of risk. The Mirriad Advertising plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.25  in Mirriad Advertising plc on December 29, 2024 and sell it today you would earn a total of  0.15  from holding Mirriad Advertising plc or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Criteo Sa  vs.  Mirriad Advertising plc

Criteo Sa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Criteo Sa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Criteo Sa is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Mirriad Advertising plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mirriad Advertising plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Mirriad Advertising reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Criteo Sa and Mirriad Advertising

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

The idea behind Criteo Sa and Mirriad Advertising plc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.