Correlation Between Perion Network and Spuntech

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

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

Diversification Opportunities for Perion Network and Spuntech

0.62

Correlation Coefficient

Perion Network  Spuntech

Poor diversification

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

Pair Corralation between Perion Network and Spuntech

Assuming the 90 days trading horizon Perion Network is expected to generate 0.98 times more return on investment than Spuntech. However, Perion Network is 1.02 times less risky than Spuntech. It trades about 0.14 of its potential returns per unit of risk. Spuntech is currently generating about -0.03 per unit of risk. If you would invest  317,100  in Perion Network on April 24, 2025 and sell it today you would earn a total of  60,700  from holding Perion Network or generate 19.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.96%
Values	Daily Returns

Perion Network  vs.  Spuntech

Perion Network

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perion Network are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Perion Network sustained solid returns over the last few months and may actually be approaching a breakup point.

Spuntech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spuntech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Spuntech is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Perion Network and Spuntech

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

The idea behind Perion Network and Spuntech 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 Commodity Directory module to find actively traded commodities issued by global exchanges.