Correlation Between Taboola and Perion Network

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

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

Diversification Opportunities for Taboola and Perion Network

0.53

Correlation Coefficient

Taboola  Perion Network

Very weak diversification

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

Pair Corralation between Taboola and Perion Network

Assuming the 90 days horizon Taboola Ltd Warrant is expected to generate 5.87 times more return on investment than Perion Network. However, Taboola is 5.87 times more volatile than Perion Network. It trades about 0.29 of its potential returns per unit of risk. Perion Network is currently generating about -0.01 per unit of risk. If you would invest  19.00  in Taboola Ltd Warrant on September 27, 2024 and sell it today you would earn a total of  18.61  from holding Taboola Ltd Warrant or generate 97.95% return on investment over 90 days.

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

Taboola Ltd Warrant  vs.  Perion Network

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.

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.

Pair Trading with Taboola and Perion Network

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

The idea behind Taboola Ltd Warrant and Perion Network 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.