Correlation Between Aduro Clean and Pinterest

Can any of the company-specific risk be diversified away by investing in both Aduro Clean 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 Aduro Clean and Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aduro Clean Technologies and Pinterest, you can compare the effects of market volatilities on Aduro Clean 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 Aduro Clean with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aduro Clean and Pinterest.

Diversification Opportunities for Aduro Clean and Pinterest

0.0

Correlation Coefficient

Aduro Clean  Pinterest

Pay attention - limited upside

The 3 months correlation between Aduro and Pinterest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aduro Clean Technologies and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and Aduro Clean 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 Aduro Clean Technologies 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 Aduro Clean i.e., Aduro Clean and Pinterest go up and down completely randomly.

Pair Corralation between Aduro Clean and Pinterest

Given the investment horizon of 90 days Aduro Clean Technologies is expected to generate 1.75 times more return on investment than Pinterest. However, Aduro Clean is 1.75 times more volatile than Pinterest. It trades about 0.16 of its potential returns per unit of risk. Pinterest is currently generating about -0.02 per unit of risk. If you would invest  455.00  in Aduro Clean Technologies on October 8, 2024 and sell it today you would earn a total of  152.00  from holding Aduro Clean Technologies or generate 33.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	70.97%
Values	Daily Returns

Aduro Clean Technologies  vs.  Pinterest

Aduro Clean Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aduro Clean Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Aduro Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Pinterest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aduro Clean and Pinterest

The main advantage of trading using opposite Aduro Clean and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aduro Clean 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.

The idea behind Aduro Clean Technologies and Pinterest 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.