Correlation Between Fednat Holding and Outbrain
Can any of the company-specific risk be diversified away by investing in both Fednat Holding and Outbrain 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 Fednat Holding and Outbrain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fednat Holding Co and Outbrain, you can compare the effects of market volatilities on Fednat Holding and Outbrain 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 Fednat Holding with a short position of Outbrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fednat Holding and Outbrain.
Diversification Opportunities for Fednat Holding and Outbrain
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fednat and Outbrain is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fednat Holding Co and Outbrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outbrain and Fednat Holding 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 Fednat Holding Co are associated (or correlated) with Outbrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outbrain has no effect on the direction of Fednat Holding i.e., Fednat Holding and Outbrain go up and down completely randomly.
Pair Corralation between Fednat Holding and Outbrain
If you would invest 400.00 in Outbrain on January 26, 2024 and sell it today you would earn a total of 11.00 from holding Outbrain or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.61% |
| Values | Daily Returns |
Fednat Holding Co vs. Outbrain
Performance |
| Timeline |
| Fednat Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Outbrain |
Fednat Holding and Outbrain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fednat Holding and Outbrain
The main advantage of trading using opposite Fednat Holding and Outbrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fednat Holding position performs unexpectedly, Outbrain 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 Outbrain will offset losses from the drop in Outbrain's long position.| Fednat Holding vs. Asure Software | Fednat Holding vs. Anheuser Busch Inbev | Fednat Holding vs. DHI Group | Fednat Holding vs. Bm Technologies |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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