Correlation Between Outbrain and Millicom International
Can any of the company-specific risk be diversified away by investing in both Outbrain and Millicom International 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 Millicom International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and Millicom International Cellular, you can compare the effects of market volatilities on Outbrain and Millicom International 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 Millicom International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and Millicom International.
Diversification Opportunities for Outbrain and Millicom International
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Outbrain and Millicom is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Millicom International Cellula in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millicom International 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 Millicom International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millicom International has no effect on the direction of Outbrain i.e., Outbrain and Millicom International go up and down completely randomly.
Pair Corralation between Outbrain and Millicom International
Allowing for the 90-day total investment horizon Outbrain is expected to generate 1.87 times more return on investment than Millicom International. However, Outbrain is 1.87 times more volatile than Millicom International Cellular. It trades about 0.21 of its potential returns per unit of risk. Millicom International Cellular is currently generating about -0.12 per unit of risk. If you would invest 446.00 in Outbrain on August 24, 2024 and sell it today you would earn a total of 64.00 from holding Outbrain or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Outbrain vs. Millicom International Cellula
Performance |
| Timeline |
| Outbrain |
| Millicom International |
Outbrain and Millicom International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and Millicom International
The main advantage of trading using opposite Outbrain and Millicom International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain position performs unexpectedly, Millicom International 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 Millicom International will offset losses from the drop in Millicom International's long position.| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
| Millicom International vs. KT Corporation | Millicom International vs. Telkom Indonesia Tbk | Millicom International vs. SK Telecom Co | Millicom International vs. PLDT Inc ADR |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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