Correlation Between IAC and Vivid Seats
Can any of the company-specific risk be diversified away by investing in both IAC 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 IAC and Vivid Seats into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAC Inc and Vivid Seats Warrant, you can compare the effects of market volatilities on IAC 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 IAC with a short position of Vivid Seats. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAC and Vivid Seats.
Diversification Opportunities for IAC and Vivid Seats
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IAC and Vivid is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding IAC Inc and Vivid Seats Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivid Seats Warrant and IAC 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 IAC Inc 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 Warrant has no effect on the direction of IAC i.e., IAC and Vivid Seats go up and down completely randomly.
Pair Corralation between IAC and Vivid Seats
Considering the 90-day investment horizon IAC is expected to generate 1.56 times less return on investment than Vivid Seats. But when comparing it to its historical volatility, IAC Inc is 7.04 times less risky than Vivid Seats. It trades about 0.05 of its potential returns per unit of risk. Vivid Seats Warrant is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Vivid Seats Warrant on November 9, 2024 and sell it today you would lose (3.00) from holding Vivid Seats Warrant or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAC Inc vs. Vivid Seats Warrant
Performance |
| Timeline |
| IAC Inc |
| Vivid Seats Warrant |
IAC and Vivid Seats Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAC and Vivid Seats
The main advantage of trading using opposite IAC and Vivid Seats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAC 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.The idea behind IAC Inc and Vivid Seats Warrant 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.| Vivid Seats vs. Vivid Seats | Vivid Seats vs. ReNew Energy Global | Vivid Seats vs. Reservoir Media Management |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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