Correlation Between Outbrain and Sabio Holdings
Can any of the company-specific risk be diversified away by investing in both Outbrain and Sabio Holdings 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 Sabio Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and Sabio Holdings, you can compare the effects of market volatilities on Outbrain and Sabio Holdings 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 Sabio Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and Sabio Holdings.
Diversification Opportunities for Outbrain and Sabio Holdings
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Outbrain and Sabio is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Sabio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabio Holdings 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 Sabio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabio Holdings has no effect on the direction of Outbrain i.e., Outbrain and Sabio Holdings go up and down completely randomly.
Pair Corralation between Outbrain and Sabio Holdings
Allowing for the 90-day total investment horizon Outbrain is expected to generate 0.38 times more return on investment than Sabio Holdings. However, Outbrain is 2.65 times less risky than Sabio Holdings. It trades about 0.28 of its potential returns per unit of risk. Sabio Holdings is currently generating about 0.07 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outbrain vs. Sabio Holdings
Performance |
| Timeline |
| Outbrain |
| Sabio Holdings |
Outbrain and Sabio Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and Sabio Holdings
The main advantage of trading using opposite Outbrain and Sabio Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain position performs unexpectedly, Sabio Holdings 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 Sabio Holdings will offset losses from the drop in Sabio Holdings' long position.| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
| Sabio Holdings vs. Trivago NV | Sabio Holdings vs. YY Inc Class | Sabio Holdings vs. DouYu International Holdings | Sabio Holdings vs. Tencent Music Entertainment |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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