Correlation Between Pinterest and Brand Engagement

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Can any of the company-specific risk be diversified away by investing in both Pinterest and Brand Engagement 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 Brand Engagement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and Brand Engagement Network, you can compare the effects of market volatilities on Pinterest and Brand Engagement 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 Brand Engagement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Brand Engagement.

Diversification Opportunities for Pinterest and Brand Engagement

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Pinterest and Brand is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Brand Engagement Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brand Engagement Network 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 Brand Engagement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brand Engagement Network has no effect on the direction of Pinterest i.e., Pinterest and Brand Engagement go up and down completely randomly.

Pair Corralation between Pinterest and Brand Engagement

Given the investment horizon of 90 days Pinterest is expected to generate 52.65 times less return on investment than Brand Engagement. But when comparing it to its historical volatility, Pinterest is 13.89 times less risky than Brand Engagement. It trades about 0.03 of its potential returns per unit of risk. Brand Engagement Network is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Brand Engagement Network on November 1, 2024 and sell it today you would earn a total of  1.01  from holding Brand Engagement Network or generate 33.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy70.65%
ValuesDaily Returns

Pinterest  vs.  Brand Engagement Network

 Performance 
       Timeline  
Pinterest 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Pinterest may actually be approaching a critical reversion point that can send shares even higher in March 2025.
Brand Engagement Network 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Brand Engagement Network are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward indicators, Brand Engagement showed solid returns over the last few months and may actually be approaching a breakup point.

Pinterest and Brand Engagement Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pinterest and Brand Engagement

The main advantage of trading using opposite Pinterest and Brand Engagement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest position performs unexpectedly, Brand Engagement 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 Brand Engagement will offset losses from the drop in Brand Engagement's long position.
The idea behind Pinterest and Brand Engagement Network pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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