Correlation Between Deluxe and Criteo Sa

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

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

Diversification Opportunities for Deluxe and Criteo Sa

-0.27

Correlation Coefficient

Deluxe  Criteo Sa

Very good diversification

The 3 months correlation between Deluxe and Criteo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Criteo Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Criteo Sa and Deluxe 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 Deluxe 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 Deluxe i.e., Deluxe and Criteo Sa go up and down completely randomly.

Pair Corralation between Deluxe and Criteo Sa

Considering the 90-day investment horizon Deluxe is expected to generate 0.67 times more return on investment than Criteo Sa. However, Deluxe is 1.49 times less risky than Criteo Sa. It trades about 0.1 of its potential returns per unit of risk. Criteo Sa is currently generating about -0.03 per unit of risk. If you would invest  2,033  in Deluxe on August 30, 2024 and sell it today you would earn a total of  294.00  from holding Deluxe or generate 14.46% return on investment over 90 days.

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

Deluxe  vs.  Criteo Sa

Deluxe

Risk-Adjusted Performance

7 of 100

OK

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

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.

Pair Trading with Deluxe and Criteo Sa

The main advantage of trading using opposite Deluxe and Criteo Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe 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.

The idea behind Deluxe and Criteo 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.