Correlation Between MediaAlpha and Locafy
Can any of the company-specific risk be diversified away by investing in both MediaAlpha and Locafy 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 Locafy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaAlpha and Locafy, you can compare the effects of market volatilities on MediaAlpha and Locafy 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 Locafy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaAlpha and Locafy.
Diversification Opportunities for MediaAlpha and Locafy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MediaAlpha and Locafy is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha and Locafy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locafy 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 Locafy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locafy has no effect on the direction of MediaAlpha i.e., MediaAlpha and Locafy go up and down completely randomly.
Pair Corralation between MediaAlpha and Locafy
Considering the 90-day investment horizon MediaAlpha is expected to generate 2.54 times less return on investment than Locafy. But when comparing it to its historical volatility, MediaAlpha is 2.25 times less risky than Locafy. It trades about 0.03 of its potential returns per unit of risk. Locafy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 736.00 in Locafy on August 27, 2024 and sell it today you would lose (50.00) from holding Locafy or give up 6.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaAlpha vs. Locafy
Performance |
| Timeline |
| MediaAlpha |
| Locafy |
MediaAlpha and Locafy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaAlpha and Locafy
The main advantage of trading using opposite MediaAlpha and Locafy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaAlpha position performs unexpectedly, Locafy 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 Locafy will offset losses from the drop in Locafy's long position.| MediaAlpha vs. Asset Entities Class | MediaAlpha vs. Yelp Inc | MediaAlpha vs. BuzzFeed | MediaAlpha vs. Vivid Seats |
| Locafy vs. Metalpha Technology Holding | Locafy vs. 36Kr Holdings | Locafy vs. TuanChe ADR | Locafy vs. Quizam Media |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |