Correlation Between INTNED and Pinterest

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Can any of the company-specific risk be diversified away by investing in both INTNED and Pinterest 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 INTNED and Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTNED 575 and Pinterest, you can compare the effects of market volatilities on INTNED and Pinterest 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 INTNED with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Pinterest.

Diversification Opportunities for INTNED and Pinterest

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between INTNED and Pinterest is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 575 and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and INTNED 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 INTNED 575 are associated (or correlated) with Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of INTNED i.e., INTNED and Pinterest go up and down completely randomly.

Pair Corralation between INTNED and Pinterest

Assuming the 90 days trading horizon INTNED is expected to generate 2.29 times less return on investment than Pinterest. But when comparing it to its historical volatility, INTNED 575 is 1.96 times less risky than Pinterest. It trades about 0.02 of its potential returns per unit of risk. Pinterest is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,428  in Pinterest on September 20, 2024 and sell it today you would earn a total of  559.00  from holding Pinterest or generate 23.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy49.29%
ValuesDaily Returns

INTNED 575  vs.  Pinterest

 Performance 
       Timeline  
INTNED 575 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days INTNED 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
Pinterest 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

INTNED and Pinterest Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with INTNED and Pinterest

The main advantage of trading using opposite INTNED and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTNED position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.
The idea behind INTNED 575 and Pinterest 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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