Correlation Between Pinterest and X FAB
Can any of the company-specific risk be diversified away by investing in both Pinterest and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and X FAB Silicon Foundries, you can compare the effects of market volatilities on Pinterest and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and X FAB.
Diversification Opportunities for Pinterest and X FAB
Weak diversification
The 3 months correlation between Pinterest and XFABF is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Pinterest i.e., Pinterest and X FAB go up and down completely randomly.
Pair Corralation between Pinterest and X FAB
Given the investment horizon of 90 days Pinterest is expected to generate 1.17 times more return on investment than X FAB. However, Pinterest is 1.17 times more volatile than X FAB Silicon Foundries. It trades about -0.07 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.29 per unit of risk. If you would invest 3,259 in Pinterest on August 31, 2024 and sell it today you would lose (227.00) from holding Pinterest or give up 6.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinterest vs. X FAB Silicon Foundries
Performance |
| Timeline |
| X FAB Silicon |
Pinterest and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and X FAB
The main advantage of trading using opposite Pinterest and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
| X FAB vs. NVIDIA | X FAB vs. Intel | X FAB vs. Taiwan Semiconductor Manufacturing | X FAB vs. Marvell Technology Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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