Correlation Between Pinterest and Acme United
Can any of the company-specific risk be diversified away by investing in both Pinterest and Acme United 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 Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and Acme United, you can compare the effects of market volatilities on Pinterest and Acme United 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 Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Acme United.
Diversification Opportunities for Pinterest and Acme United
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pinterest and Acme is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United 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 Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of Pinterest i.e., Pinterest and Acme United go up and down completely randomly.
Pair Corralation between Pinterest and Acme United
Given the investment horizon of 90 days Pinterest is expected to under-perform the Acme United. In addition to that, Pinterest is 1.04 times more volatile than Acme United. It trades about -0.08 of its total potential returns per unit of risk. Acme United is currently generating about 0.09 per unit of volatility. If you would invest 3,519 in Acme United on September 2, 2024 and sell it today you would earn a total of 932.00 from holding Acme United or generate 26.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinterest vs. Acme United
Performance |
| Timeline |
| Acme United |
Pinterest and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and Acme United
The main advantage of trading using opposite Pinterest and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| Pinterest vs. MediaAlpha | Pinterest vs. Asset Entities Class | Pinterest vs. Shutterstock | Pinterest vs. Match Group |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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