Correlation Between Genius Sports and Outbrain

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

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

Diversification Opportunities for Genius Sports and Outbrain

-0.53

Correlation Coefficient

Genius Sports  Outbrain

Excellent diversification

The 3 months correlation between Genius and Outbrain is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Genius Sports and Outbrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outbrain and Genius Sports 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 Genius Sports 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 Genius Sports i.e., Genius Sports and Outbrain go up and down completely randomly.

Pair Corralation between Genius Sports and Outbrain

Given the investment horizon of 90 days Genius Sports is expected to generate 0.92 times more return on investment than Outbrain. However, Genius Sports is 1.09 times less risky than Outbrain. It trades about 0.13 of its potential returns per unit of risk. Outbrain is currently generating about -0.25 per unit of risk. If you would invest  862.00  in Genius Sports on December 29, 2024 and sell it today you would earn a total of  222.00  from holding Genius Sports or generate 25.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Genius Sports  vs.  Outbrain

Genius Sports

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genius Sports are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Genius Sports demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Genius Sports and Outbrain

The main advantage of trading using opposite Genius Sports and Outbrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genius Sports 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 Genius Sports 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.