Correlation Between Criteo Sa and Travelzoo

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

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

Diversification Opportunities for Criteo Sa and Travelzoo

0.84

Correlation Coefficient

Criteo Sa  Travelzoo

Very poor diversification

The 3 months correlation between Criteo and Travelzoo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Criteo Sa and Travelzoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travelzoo 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 Travelzoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travelzoo has no effect on the direction of Criteo Sa i.e., Criteo Sa and Travelzoo go up and down completely randomly.

Pair Corralation between Criteo Sa and Travelzoo

Given the investment horizon of 90 days Criteo Sa is expected to generate 4.37 times less return on investment than Travelzoo. But when comparing it to its historical volatility, Criteo Sa is 1.52 times less risky than Travelzoo. It trades about 0.02 of its potential returns per unit of risk. Travelzoo is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  762.00  in Travelzoo on January 24, 2025 and sell it today you would earn a total of  521.00  from holding Travelzoo or generate 68.37% return on investment over 90 days.

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

Criteo Sa  vs.  Travelzoo

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 latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Travelzoo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Travelzoo 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 basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Criteo Sa and Travelzoo

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

The idea behind Criteo Sa and Travelzoo 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.

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 the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.