Correlation Between Criteo Sa and Innovid Corp

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

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

Diversification Opportunities for Criteo Sa and Innovid Corp

-0.09

Correlation Coefficient

Criteo Sa  Innovid Corp

Good diversification

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

Pair Corralation between Criteo Sa and Innovid Corp

Given the investment horizon of 90 days Criteo Sa is expected to under-perform the Innovid Corp. But the stock apears to be less risky and, when comparing its historical volatility, Criteo Sa is 3.22 times less risky than Innovid Corp. The stock trades about -0.02 of its potential returns per unit of risk. The Innovid Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  172.00  in Innovid Corp on September 3, 2024 and sell it today you would earn a total of  132.00  from holding Innovid Corp or generate 76.74% 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.  Innovid Corp

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 very healthy basic indicators, Criteo Sa is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Innovid Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innovid Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Innovid Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Criteo Sa and Innovid Corp

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

The idea behind Criteo Sa and Innovid Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.