Correlation Between Locafy and MediaAlpha
Can any of the company-specific risk be diversified away by investing in both Locafy 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 Locafy and MediaAlpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locafy and MediaAlpha, you can compare the effects of market volatilities on Locafy 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 Locafy with a short position of MediaAlpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locafy and MediaAlpha.
Diversification Opportunities for Locafy and MediaAlpha
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Locafy and MediaAlpha is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Locafy and MediaAlpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaAlpha and Locafy 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 Locafy 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 Locafy i.e., Locafy and MediaAlpha go up and down completely randomly.
Pair Corralation between Locafy and MediaAlpha
Given the investment horizon of 90 days Locafy is expected to generate 2.26 times more return on investment than MediaAlpha. However, Locafy is 2.26 times more volatile than MediaAlpha. It trades about 0.03 of its potential returns per unit of risk. MediaAlpha is currently generating about 0.03 per unit of risk. If you would invest 700.00 in Locafy on August 23, 2024 and sell it today you would earn a total of 0.00 from holding Locafy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locafy vs. MediaAlpha
Performance |
| Timeline |
| Locafy |
| MediaAlpha |
Locafy and MediaAlpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locafy and MediaAlpha
The main advantage of trading using opposite Locafy and MediaAlpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locafy 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.| Locafy vs. Metalpha Technology Holding | Locafy vs. 36Kr Holdings | Locafy vs. TuanChe ADR | Locafy vs. Quizam Media |
| MediaAlpha vs. Asset Entities Class | MediaAlpha vs. Yelp Inc | MediaAlpha vs. BuzzFeed | MediaAlpha vs. Vivid Seats |
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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