Correlation Between Taboola and Yelp

Can any of the company-specific risk be diversified away by investing in both Taboola and Yelp 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 Yelp 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 Yelp Inc, you can compare the effects of market volatilities on Taboola and Yelp 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 Yelp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taboola and Yelp.

Diversification Opportunities for Taboola and Yelp

0.86

Correlation Coefficient

Taboola  Yelp

Very poor diversification

The 3 months correlation between Taboola and Yelp is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Taboola Ltd Warrant and Yelp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelp Inc 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 Yelp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelp Inc has no effect on the direction of Taboola i.e., Taboola and Yelp go up and down completely randomly.

Pair Corralation between Taboola and Yelp

Assuming the 90 days horizon Taboola Ltd Warrant is expected to generate 8.91 times more return on investment than Yelp. However, Taboola is 8.91 times more volatile than Yelp Inc. It trades about 0.21 of its potential returns per unit of risk. Yelp Inc is currently generating about 0.1 per unit of risk. If you would invest  8.50  in Taboola Ltd Warrant on September 23, 2024 and sell it today you would earn a total of  21.50  from holding Taboola Ltd Warrant or generate 252.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.38%
Values	Daily Returns

Taboola Ltd Warrant  vs.  Yelp Inc

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 weak basic indicators, Taboola showed solid returns over the last few months and may actually be approaching a breakup point.

Yelp Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yelp Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Yelp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Taboola and Yelp

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

The idea behind Taboola Ltd Warrant and Yelp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.