Correlation Between Perion Network and Taboola

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

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

Diversification Opportunities for Perion Network and Taboola

0.53

Correlation Coefficient

Perion Network  Taboola

Very weak diversification

The 3 months correlation between Perion and Taboola is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Perion Network and Taboola Ltd Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taboola Warrant and Perion Network 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 Perion Network are associated (or correlated) with Taboola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taboola Warrant has no effect on the direction of Perion Network i.e., Perion Network and Taboola go up and down completely randomly.

Pair Corralation between Perion Network and Taboola

Given the investment horizon of 90 days Perion Network is expected to generate 36.46 times less return on investment than Taboola. But when comparing it to its historical volatility, Perion Network is 8.07 times less risky than Taboola. It trades about 0.05 of its potential returns per unit of risk. Taboola Ltd Warrant is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Taboola Ltd Warrant on September 27, 2024 and sell it today you would earn a total of  27.61  from holding Taboola Ltd Warrant or generate 276.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

Perion Network  vs.  Taboola Ltd Warrant

Perion Network

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perion Network are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Perion Network is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Taboola Warrant

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Taboola Ltd Warrant are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taboola showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perion Network and Taboola

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

The idea behind Perion Network and Taboola Ltd Warrant 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.