Correlation Between Outbrain and Pinterest
Can any of the company-specific risk be diversified away by investing in both Outbrain 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 Outbrain and Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and Pinterest, you can compare the effects of market volatilities on Outbrain 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 Outbrain with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and Pinterest.
Diversification Opportunities for Outbrain and Pinterest
Very good diversification
The 3 months correlation between Outbrain and Pinterest is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 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 Outbrain i.e., Outbrain and Pinterest go up and down completely randomly.
Pair Corralation between Outbrain and Pinterest
Allowing for the 90-day total investment horizon Outbrain is expected to under-perform the Pinterest. But the stock apears to be less risky and, when comparing its historical volatility, Outbrain is 1.13 times less risky than Pinterest. The stock trades about -0.32 of its potential returns per unit of risk. The Pinterest is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,992 in Pinterest on October 26, 2024 and sell it today you would earn a total of 291.00 from holding Pinterest or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outbrain vs. Pinterest
Performance |
| Timeline |
| Outbrain |
Outbrain and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and Pinterest
The main advantage of trading using opposite Outbrain and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain 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.| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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