Correlation Between Arena Group and Outbrain
Can any of the company-specific risk be diversified away by investing in both Arena Group and Outbrain 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 Arena Group and Outbrain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Group Holdings and Outbrain, you can compare the effects of market volatilities on Arena Group and Outbrain 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 Arena Group with a short position of Outbrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Group and Outbrain.
Diversification Opportunities for Arena Group and Outbrain
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arena and Outbrain is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Arena Group Holdings and Outbrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outbrain and Arena Group 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 Arena Group Holdings are associated (or correlated) with Outbrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outbrain has no effect on the direction of Arena Group i.e., Arena Group and Outbrain go up and down completely randomly.
Pair Corralation between Arena Group and Outbrain
Given the investment horizon of 90 days Arena Group Holdings is expected to generate 10.77 times more return on investment than Outbrain. However, Arena Group is 10.77 times more volatile than Outbrain. It trades about 0.09 of its potential returns per unit of risk. Outbrain is currently generating about 0.06 per unit of risk. If you would invest 95.00 in Arena Group Holdings on August 30, 2024 and sell it today you would earn a total of 57.00 from holding Arena Group Holdings or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arena Group Holdings vs. Outbrain
Performance |
| Timeline |
| Arena Group Holdings |
| Outbrain |
Arena Group and Outbrain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Group and Outbrain
The main advantage of trading using opposite Arena Group and Outbrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Group position performs unexpectedly, Outbrain 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 Outbrain will offset losses from the drop in Outbrain's long position.| Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics | Arena Group vs. KORE Group Holdings |
| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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