Correlation Between Stagwell and Criteo Sa

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

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

Diversification Opportunities for Stagwell and Criteo Sa

0.48

Correlation Coefficient

Stagwell  Criteo Sa

Very weak diversification

The 3 months correlation between Stagwell and Criteo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and Criteo Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Criteo Sa and Stagwell 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 Stagwell 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 Stagwell i.e., Stagwell and Criteo Sa go up and down completely randomly.

Pair Corralation between Stagwell and Criteo Sa

Given the investment horizon of 90 days Stagwell is expected to under-perform the Criteo Sa. But the stock apears to be less risky and, when comparing its historical volatility, Stagwell is 1.26 times less risky than Criteo Sa. The stock trades about -0.05 of its potential returns per unit of risk. The Criteo Sa is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,927  in Criteo Sa on December 29, 2024 and sell it today you would lose (263.00) from holding Criteo Sa or give up 6.7% of portfolio value over 90 days.

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

Stagwell  vs.  Criteo Sa

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 latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

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.

Pair Trading with Stagwell and Criteo Sa

The main advantage of trading using opposite Stagwell and Criteo Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell 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 Stagwell 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.