Correlation Between Criteo Sa and Omnicom

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

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

Diversification Opportunities for Criteo Sa and Omnicom

-0.45

Correlation Coefficient

Criteo Sa  Omnicom

Very good diversification

The 3 months correlation between Criteo and Omnicom is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Criteo Sa and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group 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 Omnicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicom Group has no effect on the direction of Criteo Sa i.e., Criteo Sa and Omnicom go up and down completely randomly.

Pair Corralation between Criteo Sa and Omnicom

Given the investment horizon of 90 days Criteo Sa is expected to under-perform the Omnicom. In addition to that, Criteo Sa is 2.45 times more volatile than Omnicom Group. It trades about -0.03 of its total potential returns per unit of risk. Omnicom Group is currently generating about 0.06 per unit of volatility. If you would invest  9,975  in Omnicom Group on August 30, 2024 and sell it today you would earn a total of  460.00  from holding Omnicom Group or generate 4.61% return on investment over 90 days.

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

Criteo Sa  vs.  Omnicom Group

Criteo Sa

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Omnicom Group

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Omnicom Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Omnicom is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Criteo Sa and Omnicom

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

The idea behind Criteo Sa and Omnicom Group 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.