Correlation Between Outbrain and GDEV

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

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

Diversification Opportunities for Outbrain and GDEV

-0.66

Correlation Coefficient

Outbrain  GDEV

Excellent diversification

The 3 months correlation between Outbrain and GDEV is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and GDEV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDEV Inc 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 GDEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDEV Inc has no effect on the direction of Outbrain i.e., Outbrain and GDEV go up and down completely randomly.

Pair Corralation between Outbrain and GDEV

Allowing for the 90-day total investment horizon Outbrain is expected to generate 0.38 times more return on investment than GDEV. However, Outbrain is 2.61 times less risky than GDEV. It trades about 0.21 of its potential returns per unit of risk. GDEV Inc is currently generating about 0.0 per unit of risk. If you would invest  477.00  in Outbrain on September 12, 2024 and sell it today you would earn a total of  188.00  from holding Outbrain or generate 39.41% return on investment over 90 days.

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

Outbrain  vs.  GDEV Inc

Outbrain

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Outbrain are ranked lower than 16 (%) 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.

GDEV Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GDEV Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, GDEV is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Outbrain and GDEV

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

The idea behind Outbrain and GDEV Inc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.