Correlation Between Outbrain and Pop Culture
Can any of the company-specific risk be diversified away by investing in both Outbrain and Pop Culture 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 Outbrain and Pop Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and Pop Culture Group, you can compare the effects of market volatilities on Outbrain and Pop Culture 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 Outbrain with a short position of Pop Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and Pop Culture.
Diversification Opportunities for Outbrain and Pop Culture
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Outbrain and Pop is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Pop Culture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pop Culture Group and Outbrain 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 Outbrain are associated (or correlated) with Pop Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pop Culture Group has no effect on the direction of Outbrain i.e., Outbrain and Pop Culture go up and down completely randomly.
Pair Corralation between Outbrain and Pop Culture
Allowing for the 90-day total investment horizon Outbrain is expected to generate 2.33 times less return on investment than Pop Culture. But when comparing it to its historical volatility, Outbrain is 5.56 times less risky than Pop Culture. It trades about 0.09 of its potential returns per unit of risk. Pop Culture Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 177.00 in Pop Culture Group on September 14, 2024 and sell it today you would lose (66.00) from holding Pop Culture Group or give up 37.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outbrain vs. Pop Culture Group
Performance |
| Timeline |
| Outbrain |
| Pop Culture Group |
Outbrain and Pop Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and Pop Culture
The main advantage of trading using opposite Outbrain and Pop Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain position performs unexpectedly, Pop Culture 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 Pop Culture will offset losses from the drop in Pop Culture's long position.| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
| Pop Culture vs. Hollywall Entertainment | Pop Culture vs. Kuke Music Holding | Pop Culture vs. Reading International | Pop Culture vs. Reservoir Media |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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