Correlation Between WPP PLC and Criteo Sa
Can any of the company-specific risk be diversified away by investing in both WPP PLC 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 WPP PLC and Criteo Sa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WPP PLC ADR and Criteo Sa, you can compare the effects of market volatilities on WPP PLC 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 WPP PLC with a short position of Criteo Sa. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPP PLC and Criteo Sa.
Diversification Opportunities for WPP PLC and Criteo Sa
Very good diversification
The 3 months correlation between WPP and Criteo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding WPP PLC ADR and Criteo Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Criteo Sa and WPP PLC 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 WPP PLC ADR 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 WPP PLC i.e., WPP PLC and Criteo Sa go up and down completely randomly.
Pair Corralation between WPP PLC and Criteo Sa
Considering the 90-day investment horizon WPP PLC ADR is expected to under-perform the Criteo Sa. But the stock apears to be less risky and, when comparing its historical volatility, WPP PLC ADR is 1.37 times less risky than Criteo Sa. The stock trades about -0.29 of its potential returns per unit of risk. The Criteo Sa is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 2,556 in Criteo Sa on March 26, 2025 and sell it today you would lose (102.00) from holding Criteo Sa or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WPP PLC ADR vs. Criteo Sa
Performance |
| Timeline |
| WPP PLC ADR |
| Criteo Sa |
WPP PLC and Criteo Sa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPP PLC and Criteo Sa
The main advantage of trading using opposite WPP PLC and Criteo Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPP PLC 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 WPP PLC ADR 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.| Criteo Sa vs. Deluxe | Criteo Sa vs. Emerald Expositions Events | Criteo Sa vs. Marchex | Criteo Sa vs. Integral Ad Science |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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