Correlation Between Outbrain and FingerMotion

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

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

Diversification Opportunities for Outbrain and FingerMotion

-0.57

Correlation Coefficient

Outbrain  FingerMotion

Excellent diversification

The 3 months correlation between Outbrain and FingerMotion is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and FingerMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FingerMotion 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 FingerMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FingerMotion has no effect on the direction of Outbrain i.e., Outbrain and FingerMotion go up and down completely randomly.

Pair Corralation between Outbrain and FingerMotion

Allowing for the 90-day total investment horizon Outbrain is expected to under-perform the FingerMotion. But the stock apears to be less risky and, when comparing its historical volatility, Outbrain is 1.87 times less risky than FingerMotion. The stock trades about -0.23 of its potential returns per unit of risk. The FingerMotion is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  112.00  in FingerMotion on October 24, 2024 and sell it today you would earn a total of  4.00  from holding FingerMotion or generate 3.57% 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.  FingerMotion

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.

FingerMotion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FingerMotion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Outbrain and FingerMotion

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

The idea behind Outbrain and FingerMotion 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.