Correlation Between Outbrain and Zillow
Can any of the company-specific risk be diversified away by investing in both Outbrain and Zillow 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 Zillow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and Zillow Group, you can compare the effects of market volatilities on Outbrain and Zillow 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 Zillow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and Zillow.
Diversification Opportunities for Outbrain and Zillow
Weak diversification
The 3 months correlation between Outbrain and Zillow is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Zillow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group 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 Zillow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zillow Group has no effect on the direction of Outbrain i.e., Outbrain and Zillow go up and down completely randomly.
Pair Corralation between Outbrain and Zillow
Allowing for the 90-day total investment horizon Outbrain is expected to generate 1.96 times less return on investment than Zillow. But when comparing it to its historical volatility, Outbrain is 1.03 times less risky than Zillow. It trades about 0.03 of its potential returns per unit of risk. Zillow Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,706 in Zillow Group on August 26, 2024 and sell it today you would earn a total of 4,373 from holding Zillow Group or generate 118.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outbrain vs. Zillow Group
Performance |
| Timeline |
| Outbrain |
| Zillow Group |
Outbrain and Zillow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and Zillow
The main advantage of trading using opposite Outbrain and Zillow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain position performs unexpectedly, Zillow 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 Zillow will offset losses from the drop in Zillow'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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |