Correlation Between Pinterest and Coursera

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

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

Diversification Opportunities for Pinterest and Coursera

0.06

Correlation Coefficient

Pinterest  Coursera

Significant diversification

The 3 months correlation between Pinterest and Coursera is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera 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 Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of Pinterest i.e., Pinterest and Coursera go up and down completely randomly.

Pair Corralation between Pinterest and Coursera

Given the investment horizon of 90 days Pinterest is expected to generate 0.84 times more return on investment than Coursera. However, Pinterest is 1.19 times less risky than Coursera. It trades about 0.04 of its potential returns per unit of risk. Coursera is currently generating about 0.03 per unit of risk. If you would invest  2,936  in Pinterest on September 17, 2024 and sell it today you would earn a total of  129.00  from holding Pinterest or generate 4.39% return on investment over 90 days.

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

Pinterest  vs.  Coursera

Pinterest

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Pinterest may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Coursera

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coursera are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Coursera is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pinterest and Coursera

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

The idea behind Pinterest and Coursera 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.