Correlation Between MediaAlpha and Brown Brown
Can any of the company-specific risk be diversified away by investing in both MediaAlpha and Brown Brown 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 MediaAlpha and Brown Brown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaAlpha and Brown Brown, you can compare the effects of market volatilities on MediaAlpha and Brown Brown 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 MediaAlpha with a short position of Brown Brown. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaAlpha and Brown Brown.
Diversification Opportunities for MediaAlpha and Brown Brown
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MediaAlpha and Brown is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha and Brown Brown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Brown and MediaAlpha 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 MediaAlpha are associated (or correlated) with Brown Brown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Brown has no effect on the direction of MediaAlpha i.e., MediaAlpha and Brown Brown go up and down completely randomly.
Pair Corralation between MediaAlpha and Brown Brown
Considering the 90-day investment horizon MediaAlpha is expected to under-perform the Brown Brown. In addition to that, MediaAlpha is 6.07 times more volatile than Brown Brown. It trades about -0.2 of its total potential returns per unit of risk. Brown Brown is currently generating about 0.19 per unit of volatility. If you would invest 10,587 in Brown Brown on August 24, 2024 and sell it today you would earn a total of 571.50 from holding Brown Brown or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaAlpha vs. Brown Brown
Performance |
| Timeline |
| MediaAlpha |
| Brown Brown |
MediaAlpha and Brown Brown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaAlpha and Brown Brown
The main advantage of trading using opposite MediaAlpha and Brown Brown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaAlpha position performs unexpectedly, Brown Brown 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 Brown Brown will offset losses from the drop in Brown Brown's long position.| MediaAlpha vs. Asset Entities Class | MediaAlpha vs. Yelp Inc | MediaAlpha vs. BuzzFeed | MediaAlpha vs. Vivid Seats |
| Brown Brown vs. Marsh McLennan Companies | Brown Brown vs. Aon PLC | Brown Brown vs. Willis Towers Watson | Brown Brown vs. Erie Indemnity |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |