Correlation Between Criteo Sa and Advantage Solutions

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

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

Diversification Opportunities for Criteo Sa and Advantage Solutions

0.83

Correlation Coefficient

Criteo Sa  Advantage Solutions

Very poor diversification

The 3 months correlation between Criteo and Advantage is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Criteo Sa and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions 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 Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of Criteo Sa i.e., Criteo Sa and Advantage Solutions go up and down completely randomly.

Pair Corralation between Criteo Sa and Advantage Solutions

Given the investment horizon of 90 days Criteo Sa is expected to generate 0.81 times more return on investment than Advantage Solutions. However, Criteo Sa is 1.24 times less risky than Advantage Solutions. It trades about 0.0 of its potential returns per unit of risk. Advantage Solutions is currently generating about -0.07 per unit of risk. If you would invest  3,541  in Criteo Sa on January 29, 2025 and sell it today you would lose (95.00) from holding Criteo Sa or give up 2.68% of portfolio value over 90 days.

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

Criteo Sa  vs.  Advantage Solutions

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.

Advantage Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advantage Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in May 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Criteo Sa and Advantage Solutions

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

The idea behind Criteo Sa and Advantage Solutions 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.