Correlation Between IAC and Taboola

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

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

Diversification Opportunities for IAC and Taboola

-0.52

Correlation Coefficient

IAC  Taboola

Excellent diversification

The 3 months correlation between IAC and Taboola is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding IAC Inc and Taboola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taboola and IAC 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 IAC Inc are associated (or correlated) with Taboola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taboola has no effect on the direction of IAC i.e., IAC and Taboola go up and down completely randomly.

Pair Corralation between IAC and Taboola

Considering the 90-day investment horizon IAC Inc is expected to generate 0.71 times more return on investment than Taboola. However, IAC Inc is 1.41 times less risky than Taboola. It trades about 0.11 of its potential returns per unit of risk. Taboola is currently generating about -0.09 per unit of risk. If you would invest  4,273  in IAC Inc on December 28, 2024 and sell it today you would earn a total of  613.00  from holding IAC Inc or generate 14.35% return on investment over 90 days.

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

IAC Inc  vs.  Taboola

IAC Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IAC Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, IAC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Taboola

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taboola has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators 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 IAC and Taboola

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

The idea behind IAC Inc and Taboola 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.