Correlation Between Omnicom and Criteo Sa

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

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

Diversification Opportunities for Omnicom and Criteo Sa

-0.45

Correlation Coefficient

Omnicom  Criteo Sa

Very good diversification

The 3 months correlation between Omnicom and Criteo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Omnicom Group and Criteo Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Criteo Sa and Omnicom 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 Omnicom Group 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 Omnicom i.e., Omnicom and Criteo Sa go up and down completely randomly.

Pair Corralation between Omnicom and Criteo Sa

Considering the 90-day investment horizon Omnicom Group is expected to generate 0.41 times more return on investment than Criteo Sa. However, Omnicom Group is 2.45 times less risky than Criteo Sa. It trades about 0.06 of its potential returns per unit of risk. Criteo Sa is currently generating about -0.03 per unit of risk. 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

Omnicom Group  vs.  Criteo Sa

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.

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 Omnicom and Criteo Sa

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

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.