Correlation Between Fiverr International and MediaAlpha
Can any of the company-specific risk be diversified away by investing in both Fiverr International and MediaAlpha 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 Fiverr International and MediaAlpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiverr International and MediaAlpha, you can compare the effects of market volatilities on Fiverr International and MediaAlpha 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 Fiverr International with a short position of MediaAlpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiverr International and MediaAlpha.
Diversification Opportunities for Fiverr International and MediaAlpha
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fiverr and MediaAlpha is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and MediaAlpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaAlpha and Fiverr International 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 Fiverr International are associated (or correlated) with MediaAlpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaAlpha has no effect on the direction of Fiverr International i.e., Fiverr International and MediaAlpha go up and down completely randomly.
Pair Corralation between Fiverr International and MediaAlpha
Given the investment horizon of 90 days Fiverr International is expected to generate 0.57 times more return on investment than MediaAlpha. However, Fiverr International is 1.75 times less risky than MediaAlpha. It trades about 0.31 of its potential returns per unit of risk. MediaAlpha is currently generating about -0.22 per unit of risk. If you would invest 2,460 in Fiverr International on August 27, 2024 and sell it today you would earn a total of 751.00 from holding Fiverr International or generate 30.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiverr International vs. MediaAlpha
Performance |
| Timeline |
| Fiverr International |
| MediaAlpha |
Fiverr International and MediaAlpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiverr International and MediaAlpha
The main advantage of trading using opposite Fiverr International and MediaAlpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiverr International position performs unexpectedly, MediaAlpha 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 MediaAlpha will offset losses from the drop in MediaAlpha's long position.| Fiverr International vs. Snap Inc | Fiverr International vs. Twilio Inc | Fiverr International vs. Spotify Technology SA | Fiverr International vs. Baidu Inc |
| MediaAlpha vs. Alphabet Inc Class C | MediaAlpha vs. Twilio Inc | MediaAlpha vs. Snap Inc | MediaAlpha vs. Baidu Inc |
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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