Correlation Between Grom Social and Perion Network
Can any of the company-specific risk be diversified away by investing in both Grom Social and Perion Network 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 Grom Social and Perion Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grom Social Enterprises and Perion Network, you can compare the effects of market volatilities on Grom Social and Perion Network 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 Grom Social with a short position of Perion Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grom Social and Perion Network.
Diversification Opportunities for Grom Social and Perion Network
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grom and Perion is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Grom Social Enterprises and Perion Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perion Network and Grom Social 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 Grom Social Enterprises are associated (or correlated) with Perion Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perion Network has no effect on the direction of Grom Social i.e., Grom Social and Perion Network go up and down completely randomly.
Pair Corralation between Grom Social and Perion Network
Given the investment horizon of 90 days Grom Social Enterprises is expected to under-perform the Perion Network. In addition to that, Grom Social is 2.96 times more volatile than Perion Network. It trades about -0.26 of its total potential returns per unit of risk. Perion Network is currently generating about -0.06 per unit of volatility. If you would invest 1,286 in Perion Network on September 3, 2024 and sell it today you would lose (424.00) from holding Perion Network or give up 32.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.74% |
| Values | Daily Returns |
Grom Social Enterprises vs. Perion Network
Performance |
| Timeline |
| Grom Social Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Perion Network |
Grom Social and Perion Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grom Social and Perion Network
The main advantage of trading using opposite Grom Social and Perion Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grom Social position performs unexpectedly, Perion Network 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 Perion Network will offset losses from the drop in Perion Network's long position.| Grom Social vs. Digital Brands Group | Grom Social vs. Paltalk | Grom Social vs. DatChat | Grom Social vs. Ensysce Biosciences |
| Perion Network vs. MediaAlpha | Perion Network vs. Vivid Seats | Perion Network vs. Jiayin Group | Perion Network vs. Hello Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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