Correlation Between Groupon and OB Old

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

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

Diversification Opportunities for Groupon and OB Old

-0.62

Correlation Coefficient

Groupon  OB Old

Excellent diversification

The 3 months correlation between Groupon and OB Old is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Groupon and OB Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OB Old and Groupon 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 Groupon are associated (or correlated) with OB Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OB Old has no effect on the direction of Groupon i.e., Groupon and OB Old go up and down completely randomly.

Pair Corralation between Groupon and OB Old

Given the investment horizon of 90 days Groupon is expected to generate 1.65 times more return on investment than OB Old. However, Groupon is 1.65 times more volatile than OB Old. It trades about 0.17 of its potential returns per unit of risk. OB Old is currently generating about -0.22 per unit of risk. If you would invest  1,678  in Groupon on May 5, 2025 and sell it today you would earn a total of  1,228  from holding Groupon or generate 73.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	41.27%
Values	Daily Returns

Groupon  vs.  OB Old

Groupon

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Groupon are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Groupon displayed solid returns over the last few months and may actually be approaching a breakup point.

OB Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days OB Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Groupon and OB Old

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

The idea behind Groupon and OB Old 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.