Correlation Between Pinterest and IAC

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

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

Diversification Opportunities for Pinterest and IAC

0.4

Correlation Coefficient

Pinterest  IAC

Very weak diversification

The 3 months correlation between Pinterest and IAC is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and IAC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAC Inc and Pinterest 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 Pinterest are associated (or correlated) with IAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAC Inc has no effect on the direction of Pinterest i.e., Pinterest and IAC go up and down completely randomly.

Pair Corralation between Pinterest and IAC

Given the investment horizon of 90 days Pinterest is expected to under-perform the IAC. But the stock apears to be less risky and, when comparing its historical volatility, Pinterest is 1.13 times less risky than IAC. The stock trades about -0.04 of its potential returns per unit of risk. The IAC Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  3,734  in IAC Inc on June 30, 2025 and sell it today you would lose (230.00) from holding IAC Inc or give up 6.16% of portfolio value over 90 days.

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

Pinterest  vs.  IAC Inc

Pinterest

Risk-Adjusted Performance

Weakest

Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

IAC Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days IAC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IAC is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pinterest and IAC

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

The idea behind Pinterest and IAC 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.