Correlation Between Outbrain and Nebius Group

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

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

Diversification Opportunities for Outbrain and Nebius Group

0.85

Correlation Coefficient

Outbrain  Nebius Group

Very poor diversification

The 3 months correlation between Outbrain and Nebius is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Nebius Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebius Group NV 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 Nebius Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebius Group NV has no effect on the direction of Outbrain i.e., Outbrain and Nebius Group go up and down completely randomly.

Pair Corralation between Outbrain and Nebius Group

Allowing for the 90-day total investment horizon Outbrain is expected to generate 0.42 times more return on investment than Nebius Group. However, Outbrain is 2.37 times less risky than Nebius Group. It trades about 0.52 of its potential returns per unit of risk. Nebius Group NV is currently generating about 0.14 per unit of risk. If you would invest  520.00  in Outbrain on September 25, 2024 and sell it today you would earn a total of  240.00  from holding Outbrain or generate 46.15% return on investment over 90 days.

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

Outbrain  vs.  Nebius Group NV

Outbrain

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Outbrain are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, Outbrain sustained solid returns over the last few months and may actually be approaching a breakup point.

Nebius Group NV

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nebius Group NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Nebius Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Outbrain and Nebius Group

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

The idea behind Outbrain and Nebius Group NV 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.