Correlation Between Allient and Pinterest
Can any of the company-specific risk be diversified away by investing in both Allient and Pinterest 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 Allient and Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and Pinterest, you can compare the effects of market volatilities on Allient and Pinterest 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 Allient with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Pinterest.
Diversification Opportunities for Allient and Pinterest
Excellent diversification
The 3 months correlation between Allient and Pinterest is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and Allient 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 Allient are associated (or correlated) with Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Allient i.e., Allient and Pinterest go up and down completely randomly.
Pair Corralation between Allient and Pinterest
Given the investment horizon of 90 days Allient is expected to under-perform the Pinterest. In addition to that, Allient is 1.02 times more volatile than Pinterest. It trades about -0.01 of its total potential returns per unit of risk. Pinterest is currently generating about 0.03 per unit of volatility. If you would invest 2,316 in Pinterest on August 30, 2024 and sell it today you would earn a total of 716.00 from holding Pinterest or generate 30.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. Pinterest
Performance |
| Timeline |
| Allient |
Allient and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and Pinterest
The main advantage of trading using opposite Allient and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Allient vs. Old Republic International | Allient vs. Cincinnati Financial | Allient vs. Palomar Holdings | Allient vs. Aegean Airlines SA |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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