Correlation Between Fiverr International and Outbrain

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

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

Diversification Opportunities for Fiverr International and Outbrain

0.87

Correlation Coefficient

Fiverr International  Outbrain

Very poor diversification

The 3 months correlation between Fiverr and Outbrain is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and Outbrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outbrain and Fiverr International 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 Fiverr International are associated (or correlated) with Outbrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outbrain has no effect on the direction of Fiverr International i.e., Fiverr International and Outbrain go up and down completely randomly.

Pair Corralation between Fiverr International and Outbrain

Given the investment horizon of 90 days Fiverr International is expected to generate 0.88 times more return on investment than Outbrain. However, Fiverr International is 1.14 times less risky than Outbrain. It trades about -0.12 of its potential returns per unit of risk. Outbrain is currently generating about -0.27 per unit of risk. If you would invest  3,177  in Fiverr International on December 28, 2024 and sell it today you would lose (744.00) from holding Fiverr International or give up 23.42% of portfolio value over 90 days.

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

Fiverr International  vs.  Outbrain

Fiverr International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiverr International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Outbrain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Outbrain 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fiverr International and Outbrain

The main advantage of trading using opposite Fiverr International and Outbrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiverr International position performs unexpectedly, Outbrain 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 Outbrain will offset losses from the drop in Outbrain's long position.

The idea behind Fiverr International and Outbrain 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.