Correlation Between Outbrain and TrueCar
Can any of the company-specific risk be diversified away by investing in both Outbrain and TrueCar 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 TrueCar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and TrueCar, you can compare the effects of market volatilities on Outbrain and TrueCar 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 TrueCar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and TrueCar.
Diversification Opportunities for Outbrain and TrueCar
Very good diversification
The 3 months correlation between Outbrain and TrueCar is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and TrueCar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueCar 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 TrueCar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrueCar has no effect on the direction of Outbrain i.e., Outbrain and TrueCar go up and down completely randomly.
Pair Corralation between Outbrain and TrueCar
Allowing for the 90-day total investment horizon Outbrain is expected to under-perform the TrueCar. But the stock apears to be less risky and, when comparing its historical volatility, Outbrain is 1.23 times less risky than TrueCar. The stock trades about -0.35 of its potential returns per unit of risk. The TrueCar is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 349.00 in TrueCar on November 4, 2024 and sell it today you would lose (5.00) from holding TrueCar or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outbrain vs. TrueCar
Performance |
| Timeline |
| Outbrain |
| TrueCar |
Outbrain and TrueCar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and TrueCar
The main advantage of trading using opposite Outbrain and TrueCar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain position performs unexpectedly, TrueCar 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 TrueCar will offset losses from the drop in TrueCar'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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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