Correlation Between Outbrain and BCE

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

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

Diversification Opportunities for Outbrain and BCE

-0.5

Correlation Coefficient

Outbrain  BCE

Very good diversification

The 3 months correlation between Outbrain and BCE is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Outbrain 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 Outbrain are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Outbrain i.e., Outbrain and BCE go up and down completely randomly.

Pair Corralation between Outbrain and BCE

Allowing for the 90-day total investment horizon Outbrain is expected to under-perform the BCE. In addition to that, Outbrain is 2.09 times more volatile than BCE Inc. It trades about -0.25 of its total potential returns per unit of risk. BCE Inc is currently generating about 0.06 per unit of volatility. If you would invest  2,201  in BCE Inc on December 27, 2024 and sell it today you would earn a total of  114.00  from holding BCE Inc or generate 5.18% return on investment over 90 days.

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

Outbrain  vs.  BCE Inc

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.

BCE Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, BCE is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Outbrain and BCE

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

The idea behind Outbrain and BCE Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.