Correlation Between Contextlogic and Brand Engagement
Can any of the company-specific risk be diversified away by investing in both Contextlogic and Brand Engagement 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 Contextlogic and Brand Engagement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Contextlogic and Brand Engagement Network, you can compare the effects of market volatilities on Contextlogic and Brand Engagement 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 Contextlogic with a short position of Brand Engagement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contextlogic and Brand Engagement.
Diversification Opportunities for Contextlogic and Brand Engagement
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Contextlogic and Brand is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Contextlogic and Brand Engagement Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brand Engagement Network and Contextlogic 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 Contextlogic are associated (or correlated) with Brand Engagement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brand Engagement Network has no effect on the direction of Contextlogic i.e., Contextlogic and Brand Engagement go up and down completely randomly.
Pair Corralation between Contextlogic and Brand Engagement
Given the investment horizon of 90 days Contextlogic is expected to under-perform the Brand Engagement. But the stock apears to be less risky and, when comparing its historical volatility, Contextlogic is 6.87 times less risky than Brand Engagement. The stock trades about -0.02 of its potential returns per unit of risk. The Brand Engagement Network is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2.97 in Brand Engagement Network on October 27, 2024 and sell it today you would earn a total of 2.03 from holding Brand Engagement Network or generate 68.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.65% |
| Values | Daily Returns |
Contextlogic vs. Brand Engagement Network
Performance |
| Timeline |
| Contextlogic |
| Brand Engagement Network |
Contextlogic and Brand Engagement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contextlogic and Brand Engagement
The main advantage of trading using opposite Contextlogic and Brand Engagement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contextlogic position performs unexpectedly, Brand Engagement 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 Brand Engagement will offset losses from the drop in Brand Engagement's long position.| Contextlogic vs. FDG Electric Vehicles | Contextlogic vs. Marine Products | Contextlogic vs. Brunswick | Contextlogic vs. HNI Corp |
| Brand Engagement vs. Starwin Media Holdings | Brand Engagement vs. Broadleaf Co | Brand Engagement vs. United Parks Resorts | Brand Engagement vs. National CineMedia |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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