Correlation Between Hakuhodo and Criteo Sa

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

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

Diversification Opportunities for Hakuhodo and Criteo Sa

0.73

Correlation Coefficient

Hakuhodo  Criteo Sa

Poor diversification

The 3 months correlation between Hakuhodo and Criteo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hakuhodo DY Holdings and Criteo Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Criteo Sa and Hakuhodo 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 Hakuhodo DY 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 Hakuhodo i.e., Hakuhodo and Criteo Sa go up and down completely randomly.

Pair Corralation between Hakuhodo and Criteo Sa

Assuming the 90 days horizon Hakuhodo DY Holdings is expected to under-perform the Criteo Sa. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hakuhodo DY Holdings is 2.82 times less risky than Criteo Sa. The pink sheet trades about -0.22 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  3,503  in Criteo Sa on January 25, 2024 and sell it today you would earn a total of  58.00  from holding Criteo Sa or generate 1.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Hakuhodo DY Holdings  vs.  Criteo Sa

Hakuhodo DY Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hakuhodo DY Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hakuhodo showed solid returns over the last few months and may actually be approaching a breakup point.

Criteo Sa

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Criteo Sa are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Criteo Sa displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hakuhodo and Criteo Sa

The main advantage of trading using opposite Hakuhodo and Criteo Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hakuhodo 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 Hakuhodo DY 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.