Correlation Between Genius Sports and Yelp
Can any of the company-specific risk be diversified away by investing in both Genius Sports and Yelp 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 Genius Sports and Yelp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genius Sports and Yelp Inc, you can compare the effects of market volatilities on Genius Sports and Yelp 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 Genius Sports with a short position of Yelp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genius Sports and Yelp.
Diversification Opportunities for Genius Sports and Yelp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genius and Yelp is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genius Sports and Yelp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelp Inc and Genius Sports 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 Genius Sports are associated (or correlated) with Yelp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelp Inc has no effect on the direction of Genius Sports i.e., Genius Sports and Yelp go up and down completely randomly.
Pair Corralation between Genius Sports and Yelp
Given the investment horizon of 90 days Genius Sports is expected to under-perform the Yelp. In addition to that, Genius Sports is 1.42 times more volatile than Yelp Inc. It trades about -0.04 of its total potential returns per unit of risk. Yelp Inc is currently generating about 0.0 per unit of volatility. If you would invest 4,004 in Yelp Inc on November 5, 2024 and sell it today you would lose (10.00) from holding Yelp Inc or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genius Sports vs. Yelp Inc
Performance |
| Timeline |
| Genius Sports |
| Yelp Inc |
Genius Sports and Yelp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genius Sports and Yelp
The main advantage of trading using opposite Genius Sports and Yelp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genius Sports position performs unexpectedly, Yelp 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 Yelp will offset losses from the drop in Yelp's long position.| Genius Sports vs. MediaAlpha | Genius Sports vs. Comscore | Genius Sports vs. Cheetah Mobile | Genius Sports vs. Onfolio Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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