Correlation Between Perion Network and Grom Social
Can any of the company-specific risk be diversified away by investing in both Perion Network and Grom Social 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 Perion Network and Grom Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perion Network and Grom Social Enterprises, you can compare the effects of market volatilities on Perion Network and Grom Social 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 Perion Network with a short position of Grom Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perion Network and Grom Social.
Diversification Opportunities for Perion Network and Grom Social
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Perion and Grom is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Perion Network and Grom Social Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grom Social Enterprises and Perion Network 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 Perion Network are associated (or correlated) with Grom Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grom Social Enterprises has no effect on the direction of Perion Network i.e., Perion Network and Grom Social go up and down completely randomly.
Pair Corralation between Perion Network and Grom Social
Given the investment horizon of 90 days Perion Network is expected to generate 0.34 times more return on investment than Grom Social. However, Perion Network is 2.96 times less risky than Grom Social. It trades about -0.06 of its potential returns per unit of risk. Grom Social Enterprises is currently generating about -0.26 per unit of risk. If you would invest 1,286 in Perion Network on September 3, 2024 and sell it today you would lose (424.00) from holding Perion Network or give up 32.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.74% |
| Values | Daily Returns |
Perion Network vs. Grom Social Enterprises
Performance |
| Timeline |
| Perion Network |
| Grom Social Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Perion Network and Grom Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perion Network and Grom Social
The main advantage of trading using opposite Perion Network and Grom Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perion Network position performs unexpectedly, Grom Social 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 Grom Social will offset losses from the drop in Grom Social's long position.| Perion Network vs. MediaAlpha | Perion Network vs. Vivid Seats | Perion Network vs. Jiayin Group | Perion Network vs. Hello Group |
| Grom Social vs. Digital Brands Group | Grom Social vs. Paltalk | Grom Social vs. DatChat | Grom Social vs. Ensysce Biosciences |
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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