Correlation Between Getty Images and Pinterest
Can any of the company-specific risk be diversified away by investing in both Getty Images 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 Getty Images and Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Pinterest, you can compare the effects of market volatilities on Getty Images 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 Getty Images with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Pinterest.
Diversification Opportunities for Getty Images and Pinterest
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Getty and Pinterest is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and Getty Images 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 Getty Images Holdings 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 Getty Images i.e., Getty Images and Pinterest go up and down completely randomly.
Pair Corralation between Getty Images and Pinterest
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Pinterest. In addition to that, Getty Images is 1.6 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 2,272 in Pinterest on August 27, 2024 and sell it today you would earn a total of 730.00 from holding Pinterest or generate 32.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Pinterest
Performance |
| Timeline |
| Getty Images Holdings |
Getty Images and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Pinterest
The main advantage of trading using opposite Getty Images and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images 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.| Getty Images vs. Alphabet Inc Class C | Getty Images vs. Twilio Inc | Getty Images vs. Snap Inc | Getty Images vs. Baidu Inc |
| Pinterest vs. Alphabet Inc Class C | Pinterest vs. Twilio Inc | Pinterest vs. Snap Inc | Pinterest vs. Baidu Inc |
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 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.
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