Correlation Between Outbrain and Rumble

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

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

Diversification Opportunities for Outbrain and Rumble

0.92

Correlation Coefficient

Outbrain  Rumble

Almost no diversification

The 3 months correlation between Outbrain and Rumble is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble Inc and Outbrain 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 Outbrain are associated (or correlated) with Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of Outbrain i.e., Outbrain and Rumble go up and down completely randomly.

Pair Corralation between Outbrain and Rumble

Allowing for the 90-day total investment horizon Outbrain is expected to under-perform the Rumble. But the stock apears to be less risky and, when comparing its historical volatility, Outbrain is 1.26 times less risky than Rumble. The stock trades about -0.22 of its potential returns per unit of risk. The Rumble Inc is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,092  in Rumble Inc on January 11, 2025 and sell it today you would lose (334.00) from holding Rumble Inc or give up 30.59% of portfolio value over 90 days.

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

Outbrain  vs.  Rumble Inc

Outbrain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Outbrain 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 May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Rumble Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rumble Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Outbrain and Rumble

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

The idea behind Outbrain and Rumble 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.