Correlation Between Outbrain and Thumzup Media

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

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

Diversification Opportunities for Outbrain and Thumzup Media

-0.43

Correlation Coefficient

Outbrain  Thumzup Media

Very good diversification

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

Pair Corralation between Outbrain and Thumzup Media

Allowing for the 90-day total investment horizon Outbrain is expected to under-perform the Thumzup Media. But the stock apears to be less risky and, when comparing its historical volatility, Outbrain is 1.95 times less risky than Thumzup Media. The stock trades about -0.25 of its potential returns per unit of risk. The Thumzup Media is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  302.00  in Thumzup Media on December 29, 2024 and sell it today you would earn a total of  138.00  from holding Thumzup Media or generate 45.7% 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.  Thumzup Media

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.

Thumzup Media

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thumzup Media are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Thumzup Media reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Outbrain and Thumzup Media

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

The idea behind Outbrain and Thumzup Media 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .