Correlation Between Pinterest and Allient

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

By analyzing existing cross correlation between Pinterest and Allient, you can compare the effects of market volatilities on Pinterest and Allient 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 Pinterest with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Allient.

Diversification Opportunities for Pinterest and Allient

-0.59

Correlation Coefficient

Pinterest  Allient

Excellent diversification

The 3 months correlation between Pinterest and Allient is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Pinterest 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 Pinterest are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Pinterest i.e., Pinterest and Allient go up and down completely randomly.

Pair Corralation between Pinterest and Allient

Given the investment horizon of 90 days Pinterest is expected to under-perform the Allient. In addition to that, Pinterest is 1.42 times more volatile than Allient. It trades about -0.06 of its total potential returns per unit of risk. Allient is currently generating about 0.68 per unit of volatility. If you would invest  1,819  in Allient on September 3, 2024 and sell it today you would earn a total of  778.00  from holding Allient or generate 42.77% return on investment over 90 days.

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

Pinterest  vs.  Allient

Pinterest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Allient

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pinterest and Allient

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

The idea behind Pinterest and Allient 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.