Correlation Between Pinterest and African Agriculture
Can any of the company-specific risk be diversified away by investing in both Pinterest and African Agriculture 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 Pinterest and African Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and African Agriculture Holdings, you can compare the effects of market volatilities on Pinterest and African Agriculture 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 Pinterest with a short position of African Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and African Agriculture.
Diversification Opportunities for Pinterest and African Agriculture
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pinterest and African is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and African Agriculture Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Agriculture and Pinterest 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 Pinterest are associated (or correlated) with African Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Agriculture has no effect on the direction of Pinterest i.e., Pinterest and African Agriculture go up and down completely randomly.
Pair Corralation between Pinterest and African Agriculture
Given the investment horizon of 90 days Pinterest is expected to generate 0.09 times more return on investment than African Agriculture. However, Pinterest is 10.75 times less risky than African Agriculture. It trades about 0.07 of its potential returns per unit of risk. African Agriculture Holdings is currently generating about -0.33 per unit of risk. If you would invest 2,931 in Pinterest on September 12, 2024 and sell it today you would earn a total of 262.00 from holding Pinterest or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 20.31% |
| Values | Daily Returns |
Pinterest vs. African Agriculture Holdings
Performance |
| Timeline |
| African Agriculture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pinterest and African Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and African Agriculture
The main advantage of trading using opposite Pinterest and African Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest position performs unexpectedly, African Agriculture 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 African Agriculture will offset losses from the drop in African Agriculture's long position.| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
| African Agriculture vs. Trupanion | African Agriculture vs. Employers Holdings | African Agriculture vs. Sligro Food Group | African Agriculture vs. Siriuspoint |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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