Correlation Between Outbrain and Trump Media

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

By analyzing existing cross correlation between Outbrain and Trump Media Technology, you can compare the effects of market volatilities on Outbrain and Trump Media 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 Trump Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and Trump Media.

Diversification Opportunities for Outbrain and Trump Media

0.43

Correlation Coefficient

Outbrain  Trump Media

Very weak diversification

The 3 months correlation between Outbrain and Trump is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology 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 Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of Outbrain i.e., Outbrain and Trump Media go up and down completely randomly.

Pair Corralation between Outbrain and Trump Media

Allowing for the 90-day total investment horizon Outbrain is expected to under-perform the Trump Media. But the stock apears to be less risky and, when comparing its historical volatility, Outbrain is 1.52 times less risky than Trump Media. The stock trades about -0.25 of its potential returns per unit of risk. The Trump Media Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,337  in Trump Media Technology on December 28, 2024 and sell it today you would lose (276.00) from holding Trump Media Technology or give up 11.81% of portfolio value over 90 days.

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

Outbrain  vs.  Trump Media Technology

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.

Trump Media Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trump Media Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Trump Media is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Outbrain and Trump Media

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

The idea behind Outbrain and Trump Media Technology 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.