Correlation Between Constellation Brands and Pinterest
Can any of the company-specific risk be diversified away by investing in both Constellation Brands and Pinterest 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 Constellation Brands and Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Brands Class and Pinterest, you can compare the effects of market volatilities on Constellation Brands and Pinterest 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 Constellation Brands with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and Pinterest.
Diversification Opportunities for Constellation Brands and Pinterest
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Constellation and Pinterest is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Constellation Brands i.e., Constellation Brands and Pinterest go up and down completely randomly.
Pair Corralation between Constellation Brands and Pinterest
Considering the 90-day investment horizon Constellation Brands Class is expected to generate 0.39 times more return on investment than Pinterest. However, Constellation Brands Class is 2.54 times less risky than Pinterest. It trades about -0.03 of its potential returns per unit of risk. Pinterest is currently generating about -0.03 per unit of risk. If you would invest 23,651 in Constellation Brands Class on August 29, 2024 and sell it today you would lose (291.00) from holding Constellation Brands Class or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Constellation Brands Class vs. Pinterest
Performance |
| Timeline |
| Constellation Brands |
Constellation Brands and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Brands and Pinterest
The main advantage of trading using opposite Constellation Brands and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Brands position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
| Pinterest vs. Alphabet Inc Class C | Pinterest vs. Twilio Inc | Pinterest vs. Snap Inc | Pinterest vs. Baidu Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |