Correlation Between Outbrain and Trivago NV
Can any of the company-specific risk be diversified away by investing in both Outbrain and Trivago NV 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 Trivago NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and Trivago NV, you can compare the effects of market volatilities on Outbrain and Trivago NV 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 Trivago NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and Trivago NV.
Diversification Opportunities for Outbrain and Trivago NV
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Outbrain and Trivago is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Trivago NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trivago NV 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 Trivago NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trivago NV has no effect on the direction of Outbrain i.e., Outbrain and Trivago NV go up and down completely randomly.
Pair Corralation between Outbrain and Trivago NV
Allowing for the 90-day total investment horizon Outbrain is expected to under-perform the Trivago NV. But the stock apears to be less risky and, when comparing its historical volatility, Outbrain is 1.85 times less risky than Trivago NV. The stock trades about -0.31 of its potential returns per unit of risk. The Trivago NV is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 231.00 in Trivago NV on November 5, 2024 and sell it today you would earn a total of 52.00 from holding Trivago NV or generate 22.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outbrain vs. Trivago NV
Performance |
| Timeline |
| Outbrain |
| Trivago NV |
Outbrain and Trivago NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and Trivago NV
The main advantage of trading using opposite Outbrain and Trivago NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain position performs unexpectedly, Trivago NV 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 Trivago NV will offset losses from the drop in Trivago NV's long position.| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
| Trivago NV vs. Upexi Inc | Trivago NV vs. Cheetah Mobile | Trivago NV vs. Comscore | Trivago NV vs. EverQuote 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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