Correlation Between Auto Trader and Vivid Seats
Can any of the company-specific risk be diversified away by investing in both Auto Trader and Vivid Seats 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 Auto Trader and Vivid Seats into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auto Trader Group and Vivid Seats, you can compare the effects of market volatilities on Auto Trader and Vivid Seats 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 Auto Trader with a short position of Vivid Seats. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and Vivid Seats.
Diversification Opportunities for Auto Trader and Vivid Seats
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auto and Vivid is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and Vivid Seats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivid Seats and Auto Trader 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 Auto Trader Group are associated (or correlated) with Vivid Seats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivid Seats has no effect on the direction of Auto Trader i.e., Auto Trader and Vivid Seats go up and down completely randomly.
Pair Corralation between Auto Trader and Vivid Seats
Assuming the 90 days horizon Auto Trader Group is expected to generate 0.52 times more return on investment than Vivid Seats. However, Auto Trader Group is 1.91 times less risky than Vivid Seats. It trades about -0.1 of its potential returns per unit of risk. Vivid Seats is currently generating about -0.12 per unit of risk. If you would invest 246.00 in Auto Trader Group on November 4, 2024 and sell it today you would lose (7.00) from holding Auto Trader Group or give up 2.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auto Trader Group vs. Vivid Seats
Performance |
| Timeline |
| Auto Trader Group |
| Vivid Seats |
Auto Trader and Vivid Seats Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and Vivid Seats
The main advantage of trading using opposite Auto Trader and Vivid Seats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, Vivid Seats 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 Vivid Seats will offset losses from the drop in Vivid Seats' long position.| Auto Trader vs. Tinybeans Group Limited | Auto Trader vs. DGTL Holdings | Auto Trader vs. Sabio Holdings | Auto Trader vs. Zoomd Technologies |
| Vivid Seats vs. Onfolio Holdings | Vivid Seats vs. EverQuote Class A | Vivid Seats vs. Asset Entities Class | Vivid Seats vs. MediaAlpha |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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