Correlation Between Outbrain and IAC
Can any of the company-specific risk be diversified away by investing in both Outbrain and IAC 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 IAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and IAC Inc, you can compare the effects of market volatilities on Outbrain and IAC 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 IAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and IAC.
Diversification Opportunities for Outbrain and IAC
Good diversification
The 3 months correlation between Outbrain and IAC is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and IAC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAC Inc 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 IAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAC Inc has no effect on the direction of Outbrain i.e., Outbrain and IAC go up and down completely randomly.
Pair Corralation between Outbrain and IAC
Allowing for the 90-day total investment horizon Outbrain is expected to generate 0.87 times more return on investment than IAC. However, Outbrain is 1.15 times less risky than IAC. It trades about 0.28 of its potential returns per unit of risk. IAC Inc is currently generating about -0.06 per unit of risk. If you would invest 439.00 in Outbrain on August 27, 2024 and sell it today you would earn a total of 81.00 from holding Outbrain or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outbrain vs. IAC Inc
Performance |
| Timeline |
| Outbrain |
| IAC Inc |
Outbrain and IAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and IAC
The main advantage of trading using opposite Outbrain and IAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain position performs unexpectedly, IAC 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 IAC will offset losses from the drop in IAC's long position.| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
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 CEOs Directory module to screen CEOs from public companies around the world.
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