Correlation Between Endeavor Group and Criteo Sa

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

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

Diversification Opportunities for Endeavor Group and Criteo Sa

-0.58

Correlation Coefficient

Endeavor Group  Criteo Sa

Excellent diversification

The 3 months correlation between Endeavor and Criteo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Endeavor Group Holdings and Criteo Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Criteo Sa and Endeavor Group 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 Endeavor Group Holdings 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 Endeavor Group i.e., Endeavor Group and Criteo Sa go up and down completely randomly.

Pair Corralation between Endeavor Group and Criteo Sa

Considering the 90-day investment horizon Endeavor Group is expected to generate 6.87 times less return on investment than Criteo Sa. But when comparing it to its historical volatility, Endeavor Group Holdings is 4.0 times less risky than Criteo Sa. It trades about 0.26 of its potential returns per unit of risk. Criteo Sa is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  3,344  in Criteo Sa on September 2, 2024 and sell it today you would earn a total of  734.00  from holding Criteo Sa or generate 21.95% return on investment over 90 days.

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

Endeavor Group Holdings  vs.  Criteo Sa

Endeavor Group Holdings

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavor Group Holdings are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental indicators, Endeavor Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Endeavor Group and Criteo Sa

The main advantage of trading using opposite Endeavor Group and Criteo Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavor Group 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 Endeavor Group Holdings 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.