Correlation Between Criteo Sa and Stagwell

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

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

Diversification Opportunities for Criteo Sa and Stagwell

0.02

Correlation Coefficient

Criteo Sa  Stagwell

Significant diversification

The 3 months correlation between Criteo and Stagwell is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Criteo Sa and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Criteo Sa i.e., Criteo Sa and Stagwell go up and down completely randomly.

Pair Corralation between Criteo Sa and Stagwell

Given the investment horizon of 90 days Criteo Sa is expected to generate 1.32 times more return on investment than Stagwell. However, Criteo Sa is 1.32 times more volatile than Stagwell. It trades about 0.09 of its potential returns per unit of risk. Stagwell is currently generating about -0.09 per unit of risk. If you would invest  3,824  in Criteo Sa on November 19, 2024 and sell it today you would earn a total of  548.00  from holding Criteo Sa or generate 14.33% return on investment over 90 days.

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

Criteo Sa  vs.  Stagwell

Criteo Sa

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Criteo Sa are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Criteo Sa displayed solid returns over the last few months and may actually be approaching a breakup point.

Stagwell

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Criteo Sa and Stagwell

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

The idea behind Criteo Sa and Stagwell 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.