Correlation Between Paramount Global and Innovid Corp
Can any of the company-specific risk be diversified away by investing in both Paramount Global and Innovid Corp 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 Paramount Global and Innovid Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paramount Global Class and Innovid Corp, you can compare the effects of market volatilities on Paramount Global and Innovid Corp 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 Paramount Global with a short position of Innovid Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Global and Innovid Corp.
Diversification Opportunities for Paramount Global and Innovid Corp
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Paramount and Innovid is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Global Class and Innovid Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovid Corp and Paramount Global 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 Paramount Global Class are associated (or correlated) with Innovid Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovid Corp has no effect on the direction of Paramount Global i.e., Paramount Global and Innovid Corp go up and down completely randomly.
Pair Corralation between Paramount Global and Innovid Corp
Given the investment horizon of 90 days Paramount Global Class is expected to under-perform the Innovid Corp. But the stock apears to be less risky and, when comparing its historical volatility, Paramount Global Class is 1.97 times less risky than Innovid Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Innovid Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Innovid Corp on September 23, 2024 and sell it today you would earn a total of 167.00 from holding Innovid Corp or generate 111.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramount Global Class vs. Innovid Corp
Performance |
| Timeline |
| Paramount Global Class |
| Innovid Corp |
Paramount Global and Innovid Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramount Global and Innovid Corp
The main advantage of trading using opposite Paramount Global and Innovid Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Global position performs unexpectedly, Innovid Corp 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 Innovid Corp will offset losses from the drop in Innovid Corp's long position.| Paramount Global vs. Marchex | Paramount Global vs. Direct Digital Holdings | Paramount Global vs. Cimpress NV | Paramount Global vs. Emerald Expositions Events |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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