Correlation Between ANGI Homeservices and Pinterest

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

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

Diversification Opportunities for ANGI Homeservices and Pinterest

0.67

Correlation Coefficient

ANGI Homeservices  Pinterest

Poor diversification

The 3 months correlation between ANGI and Pinterest is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ANGI Homeservices and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and ANGI Homeservices 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 ANGI Homeservices 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 ANGI Homeservices i.e., ANGI Homeservices and Pinterest go up and down completely randomly.

Pair Corralation between ANGI Homeservices and Pinterest

Given the investment horizon of 90 days ANGI Homeservices is expected to generate 1.45 times more return on investment than Pinterest. However, ANGI Homeservices is 1.45 times more volatile than Pinterest. It trades about 0.19 of its potential returns per unit of risk. Pinterest is currently generating about 0.1 per unit of risk. If you would invest  165.00  in ANGI Homeservices on October 22, 2024 and sell it today you would earn a total of  18.00  from holding ANGI Homeservices or generate 10.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ANGI Homeservices  vs.  Pinterest

ANGI Homeservices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGI Homeservices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 ANGI Homeservices and Pinterest

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

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.