Correlation Between Criteo Sa and International Business

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Can any of the company-specific risk be diversified away by investing in both Criteo Sa and International Business 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 International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Criteo Sa and International Business Machines, you can compare the effects of market volatilities on Criteo Sa and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Criteo Sa and International Business.

Diversification Opportunities for Criteo Sa and International Business

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Criteo and International is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Criteo Sa and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Criteo Sa i.e., Criteo Sa and International Business go up and down completely randomly.

Pair Corralation between Criteo Sa and International Business

Given the investment horizon of 90 days Criteo Sa is expected to generate 1.27 times less return on investment than International Business. In addition to that, Criteo Sa is 1.91 times more volatile than International Business Machines. It trades about 0.02 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.05 per unit of volatility. If you would invest  13,744  in International Business Machines on September 6, 2022 and sell it today you would earn a total of  976.42  from holding International Business Machines or generate 7.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Criteo Sa  vs.  International Business Machine

 Performance (%) 
       Timeline  
Criteo Sa 
Criteo Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Criteo Sa are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Criteo Sa is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Criteo Price Channel

International Business 
International Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental drivers, International Business revealed solid returns over the last few months and may actually be approaching a breakup point.

International Price Channel

Criteo Sa and International Business Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Criteo Sa and International Business

The main advantage of trading using opposite Criteo Sa and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Criteo Sa position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.
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The idea behind Criteo Sa and International Business Machines 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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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 Probability Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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