Correlation Between Outbrain and Thryv Holdings

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

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

Diversification Opportunities for Outbrain and Thryv Holdings

-0.38

Correlation Coefficient

Outbrain  Thryv Holdings

Very good diversification

The 3 months correlation between Outbrain and Thryv is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Thryv Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thryv Holdings 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 Thryv Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thryv Holdings has no effect on the direction of Outbrain i.e., Outbrain and Thryv Holdings go up and down completely randomly.

Pair Corralation between Outbrain and Thryv Holdings

Allowing for the 90-day total investment horizon Outbrain is expected to generate 0.88 times more return on investment than Thryv Holdings. However, Outbrain is 1.14 times less risky than Thryv Holdings. It trades about 0.13 of its potential returns per unit of risk. Thryv Holdings is currently generating about -0.03 per unit of risk. If you would invest  483.00  in Outbrain on September 28, 2024 and sell it today you would earn a total of  245.00  from holding Outbrain or generate 50.72% return on investment over 90 days.

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

Outbrain  vs.  Thryv Holdings

Outbrain

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Outbrain are ranked lower than 17 (%) 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.

Thryv Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thryv Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Outbrain and Thryv Holdings

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

The idea behind Outbrain and Thryv Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.