Correlation Between Pinterest and FEDEX

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

By analyzing existing cross correlation between Pinterest and FEDEX P 41, you can compare the effects of market volatilities on Pinterest and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and FEDEX.

Diversification Opportunities for Pinterest and FEDEX

0.3

Correlation Coefficient

Pinterest  FEDEX

Weak diversification

The 3 months correlation between Pinterest and FEDEX is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and FEDEX P 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 41 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 41 has no effect on the direction of Pinterest i.e., Pinterest and FEDEX go up and down completely randomly.

Pair Corralation between Pinterest and FEDEX

Given the investment horizon of 90 days Pinterest is expected to generate 2.16 times less return on investment than FEDEX. In addition to that, Pinterest is 2.19 times more volatile than FEDEX P 41. It trades about 0.0 of its total potential returns per unit of risk. FEDEX P 41 is currently generating about 0.01 per unit of volatility. If you would invest  8,225  in FEDEX P 41 on October 25, 2024 and sell it today you would earn a total of  8.00  from holding FEDEX P 41 or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	77.97%
Values	Daily Returns

Pinterest  vs.  FEDEX P 41

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.

FEDEX P 41

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FEDEX P 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FEDEX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pinterest and FEDEX

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

The idea behind Pinterest and FEDEX P 41 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.