Correlation Between Getty Images and Pinterest

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

By analyzing existing cross correlation between Getty Images Holdings and Pinterest, you can compare the effects of market volatilities on Getty Images and Pinterest 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 Getty Images with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Pinterest.

Diversification Opportunities for Getty Images and Pinterest

0.15

Correlation Coefficient

Getty Images  Pinterest

Average diversification

The 3 months correlation between Getty and Pinterest is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and Getty Images 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 Getty Images Holdings are associated (or correlated) with Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Getty Images i.e., Getty Images and Pinterest go up and down completely randomly.

Pair Corralation between Getty Images and Pinterest

Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Pinterest. But the stock apears to be less risky and, when comparing its historical volatility, Getty Images Holdings is 1.93 times less risky than Pinterest. The stock trades about -0.14 of its potential returns per unit of risk. The Pinterest is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,528  in Pinterest on February 3, 2024 and sell it today you would earn a total of  522.00  from holding Pinterest or generate 14.8% return on investment over 90 days.

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

Getty Images Holdings  vs.  Pinterest

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pinterest

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Getty Images and Pinterest

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

The idea behind Getty Images Holdings and Pinterest 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.