Correlation Between MoneyHero Limited and Outbrain

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

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

Diversification Opportunities for MoneyHero Limited and Outbrain

-0.06

Correlation Coefficient

MoneyHero Limited  Outbrain

Good diversification

The 3 months correlation between MoneyHero and Outbrain is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding MoneyHero Limited Class and Outbrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outbrain and MoneyHero Limited 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 MoneyHero Limited Class 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 MoneyHero Limited i.e., MoneyHero Limited and Outbrain go up and down completely randomly.

Pair Corralation between MoneyHero Limited and Outbrain

Considering the 90-day investment horizon MoneyHero Limited Class is expected to under-perform the Outbrain. But the stock apears to be less risky and, when comparing its historical volatility, MoneyHero Limited Class is 1.28 times less risky than Outbrain. The stock trades about -0.04 of its potential returns per unit of risk. The Outbrain is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  537.00  in Outbrain on September 27, 2024 and sell it today you would earn a total of  206.50  from holding Outbrain or generate 38.45% return on investment over 90 days.

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

MoneyHero Limited Class  vs.  Outbrain

MoneyHero Limited Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MoneyHero Limited Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, MoneyHero Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Outbrain

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Outbrain are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, Outbrain sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MoneyHero Limited and Outbrain

The main advantage of trading using opposite MoneyHero Limited and Outbrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MoneyHero Limited 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 MoneyHero Limited Class 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.