Correlation Between Perion Network and ANGI Homeservices

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

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

Diversification Opportunities for Perion Network and ANGI Homeservices

-0.01

Correlation Coefficient

Perion Network  ANGI Homeservices

Good diversification

The 3 months correlation between Perion and ANGI is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Perion Network and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices and Perion Network 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 Perion Network are associated (or correlated) with ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Perion Network i.e., Perion Network and ANGI Homeservices go up and down completely randomly.

Pair Corralation between Perion Network and ANGI Homeservices

Given the investment horizon of 90 days Perion Network is expected to under-perform the ANGI Homeservices. But the stock apears to be less risky and, when comparing its historical volatility, Perion Network is 1.35 times less risky than ANGI Homeservices. The stock trades about -0.18 of its potential returns per unit of risk. The ANGI Homeservices is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  258.00  in ANGI Homeservices on June 16, 2024 and sell it today you would earn a total of  6.00  from holding ANGI Homeservices or generate 2.33% return on investment over 90 days.

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

Perion Network  vs.  ANGI Homeservices

Perion Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perion Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in October 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ANGI Homeservices

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANGI Homeservices are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, ANGI Homeservices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perion Network and ANGI Homeservices

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

The idea behind Perion Network and ANGI Homeservices 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.