Correlation Between Pinterest and Legacy Education

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

By analyzing existing cross correlation between Pinterest and Legacy Education Alliance, you can compare the effects of market volatilities on Pinterest and Legacy Education 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 Legacy Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Legacy Education.

Diversification Opportunities for Pinterest and Legacy Education

0.09

Correlation Coefficient

Pinterest  Legacy Education

Significant diversification

The 3 months correlation between Pinterest and Legacy is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Legacy Education Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legacy Education Alliance 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 Legacy Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legacy Education Alliance has no effect on the direction of Pinterest i.e., Pinterest and Legacy Education go up and down completely randomly.

Pair Corralation between Pinterest and Legacy Education

Given the investment horizon of 90 days Pinterest is expected to generate 7.54 times less return on investment than Legacy Education. But when comparing it to its historical volatility, Pinterest is 5.79 times less risky than Legacy Education. It trades about 0.1 of its potential returns per unit of risk. Legacy Education Alliance is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Legacy Education Alliance on May 21, 2025 and sell it today you would earn a total of  0.01  from holding Legacy Education Alliance or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Pinterest  vs.  Legacy Education Alliance

Pinterest

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Pinterest unveiled solid returns over the last few months and may actually be approaching a breakup point.

Legacy Education Alliance

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Legacy Education Alliance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Legacy Education demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pinterest and Legacy Education

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

The idea behind Pinterest and Legacy Education Alliance 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.