Correlation Between Criteo Sa and Emerald Expositions

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

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

Diversification Opportunities for Criteo Sa and Emerald Expositions

-0.09

Correlation Coefficient

Criteo Sa  Emerald Expositions

Good diversification

The 3 months correlation between Criteo and Emerald is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Criteo Sa and Emerald Expositions Events in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Expositions 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 Emerald Expositions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Expositions has no effect on the direction of Criteo Sa i.e., Criteo Sa and Emerald Expositions go up and down completely randomly.

Pair Corralation between Criteo Sa and Emerald Expositions

Given the investment horizon of 90 days Criteo Sa is expected to generate 0.85 times more return on investment than Emerald Expositions. However, Criteo Sa is 1.17 times less risky than Emerald Expositions. It trades about 0.22 of its potential returns per unit of risk. Emerald Expositions Events is currently generating about -0.01 per unit of risk. If you would invest  2,628  in Criteo Sa on February 2, 2024 and sell it today you would earn a total of  1,096  from holding Criteo Sa or generate 41.7% return on investment over 90 days.

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

Criteo Sa  vs.  Emerald Expositions Events

Criteo Sa

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Criteo Sa are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Criteo Sa displayed solid returns over the last few months and may actually be approaching a breakup point.

Emerald Expositions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emerald Expositions Events has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Emerald Expositions is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Criteo Sa and Emerald Expositions

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

The idea behind Criteo Sa and Emerald Expositions Events 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.