Correlation Between Pinterest and Outbrain
Can any of the company-specific risk be diversified away by investing in both Pinterest and Outbrain 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 Outbrain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and Outbrain, you can compare the effects of market volatilities on Pinterest and Outbrain 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 Outbrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Outbrain.
Diversification Opportunities for Pinterest and Outbrain
Very good diversification
The 3 months correlation between Pinterest and Outbrain is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Outbrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outbrain 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 Outbrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outbrain has no effect on the direction of Pinterest i.e., Pinterest and Outbrain go up and down completely randomly.
Pair Corralation between Pinterest and Outbrain
Given the investment horizon of 90 days Pinterest is expected to under-perform the Outbrain. In addition to that, Pinterest is 1.21 times more volatile than Outbrain. It trades about -0.07 of its total potential returns per unit of risk. Outbrain is currently generating about 0.23 per unit of volatility. If you would invest 439.00 in Outbrain on August 27, 2024 and sell it today you would earn a total of 66.00 from holding Outbrain or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinterest vs. Outbrain
Performance |
| Timeline |
| Outbrain |
Pinterest and Outbrain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and Outbrain
The main advantage of trading using opposite Pinterest and Outbrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest position performs unexpectedly, Outbrain 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 Outbrain will offset losses from the drop in Outbrain's long position.| Pinterest vs. Alphabet Inc Class C | Pinterest vs. Twilio Inc | Pinterest vs. Snap Inc | Pinterest vs. Baidu Inc |
| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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