Correlation Between MediaAlpha and Alphabet
Can any of the company-specific risk be diversified away by investing in both MediaAlpha and Alphabet 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 Alphabet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaAlpha and Alphabet Inc Class A, you can compare the effects of market volatilities on MediaAlpha and Alphabet 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 Alphabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaAlpha and Alphabet.
Diversification Opportunities for MediaAlpha and Alphabet
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MediaAlpha and Alphabet is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha and Alphabet Inc Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet Class A 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 Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet Class A has no effect on the direction of MediaAlpha i.e., MediaAlpha and Alphabet go up and down completely randomly.
Pair Corralation between MediaAlpha and Alphabet
Considering the 90-day investment horizon MediaAlpha is expected to under-perform the Alphabet. In addition to that, MediaAlpha is 4.37 times more volatile than Alphabet Inc Class A. It trades about -0.23 of its total potential returns per unit of risk. Alphabet Inc Class A is currently generating about 0.18 per unit of volatility. If you would invest 16,514 in Alphabet Inc Class A on August 23, 2024 and sell it today you would earn a total of 1,084 from holding Alphabet Inc Class A or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaAlpha vs. Alphabet Inc Class A
Performance |
| Timeline |
| MediaAlpha |
| Alphabet Class A |
MediaAlpha and Alphabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaAlpha and Alphabet
The main advantage of trading using opposite MediaAlpha and Alphabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaAlpha position performs unexpectedly, Alphabet 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 Alphabet will offset losses from the drop in Alphabet's long position.| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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