Correlation Between Pinterest and Premium Catering
Can any of the company-specific risk be diversified away by investing in both Pinterest and Premium Catering 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 Premium Catering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and Premium Catering Limited, you can compare the effects of market volatilities on Pinterest and Premium Catering 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 Premium Catering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Premium Catering.
Diversification Opportunities for Pinterest and Premium Catering
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pinterest and Premium is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Premium Catering Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Catering 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 Premium Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Catering has no effect on the direction of Pinterest i.e., Pinterest and Premium Catering go up and down completely randomly.
Pair Corralation between Pinterest and Premium Catering
Given the investment horizon of 90 days Pinterest is expected to generate 0.23 times more return on investment than Premium Catering. However, Pinterest is 4.29 times less risky than Premium Catering. It trades about 0.03 of its potential returns per unit of risk. Premium Catering Limited is currently generating about -0.09 per unit of risk. If you would invest 2,484 in Pinterest on November 1, 2024 and sell it today you would earn a total of 823.00 from holding Pinterest or generate 33.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 17.61% |
| Values | Daily Returns |
Pinterest vs. Premium Catering Limited
Performance |
| Timeline |
| Premium Catering |
Pinterest and Premium Catering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and Premium Catering
The main advantage of trading using opposite Pinterest and Premium Catering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest position performs unexpectedly, Premium Catering 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 Premium Catering will offset losses from the drop in Premium Catering's long position.| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
| Premium Catering vs. Kingdee International Software | Premium Catering vs. Integral Ad Science | Premium Catering vs. Pinterest | Premium Catering vs. Coupang LLC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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