Correlation Between MediaAlpha and Prosus NV
Can any of the company-specific risk be diversified away by investing in both MediaAlpha and Prosus NV 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 Prosus NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaAlpha and Prosus NV ADR, you can compare the effects of market volatilities on MediaAlpha and Prosus NV 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 Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaAlpha and Prosus NV.
Diversification Opportunities for MediaAlpha and Prosus NV
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MediaAlpha and Prosus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha and Prosus NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV ADR 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 Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV ADR has no effect on the direction of MediaAlpha i.e., MediaAlpha and Prosus NV go up and down completely randomly.
Pair Corralation between MediaAlpha and Prosus NV
Considering the 90-day investment horizon MediaAlpha is expected to generate 4.39 times less return on investment than Prosus NV. In addition to that, MediaAlpha is 1.92 times more volatile than Prosus NV ADR. It trades about 0.01 of its total potential returns per unit of risk. Prosus NV ADR is currently generating about 0.12 per unit of volatility. If you would invest 740.00 in Prosus NV ADR on November 5, 2024 and sell it today you would earn a total of 27.00 from holding Prosus NV ADR or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaAlpha vs. Prosus NV ADR
Performance |
| Timeline |
| MediaAlpha |
| Prosus NV ADR |
MediaAlpha and Prosus NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaAlpha and Prosus NV
The main advantage of trading using opposite MediaAlpha and Prosus NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaAlpha position performs unexpectedly, Prosus NV 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 Prosus NV will offset losses from the drop in Prosus NV's long position.| MediaAlpha vs. Asset Entities Class | MediaAlpha vs. Yelp Inc | MediaAlpha vs. BuzzFeed | MediaAlpha vs. Vivid Seats |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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