Correlation Between ChampionX and Pinterest
Can any of the company-specific risk be diversified away by investing in both ChampionX 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 ChampionX and Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Pinterest, you can compare the effects of market volatilities on ChampionX 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 ChampionX with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Pinterest.
Diversification Opportunities for ChampionX and Pinterest
Modest diversification
The 3 months correlation between ChampionX and Pinterest is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and ChampionX 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 ChampionX 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 ChampionX i.e., ChampionX and Pinterest go up and down completely randomly.
Pair Corralation between ChampionX and Pinterest
Considering the 90-day investment horizon ChampionX is expected to generate 1.93 times less return on investment than Pinterest. But when comparing it to its historical volatility, ChampionX is 1.39 times less risky than Pinterest. It trades about 0.03 of its potential returns per unit of risk. Pinterest is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,387 in Pinterest on September 1, 2024 and sell it today you would earn a total of 645.00 from holding Pinterest or generate 27.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Pinterest
Performance |
| Timeline |
| ChampionX |
ChampionX and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Pinterest
The main advantage of trading using opposite ChampionX and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX 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.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Pinterest vs. MediaAlpha | Pinterest vs. Asset Entities Class | Pinterest vs. Yelp Inc | Pinterest vs. Shutterstock |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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