Correlation Between Match and ANGI Homeservices
Can any of the company-specific risk be diversified away by investing in both Match and ANGI Homeservices 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 Match and ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Match Group and ANGI Homeservices, you can compare the effects of market volatilities on Match and ANGI Homeservices 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 Match with a short position of ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Match and ANGI Homeservices.
Diversification Opportunities for Match and ANGI Homeservices
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Match and ANGI is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Match Group and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices and Match 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 Match Group are associated (or correlated) with ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Match i.e., Match and ANGI Homeservices go up and down completely randomly.
Pair Corralation between Match and ANGI Homeservices
Given the investment horizon of 90 days Match is expected to generate 1.57 times less return on investment than ANGI Homeservices. But when comparing it to its historical volatility, Match Group is 1.75 times less risky than ANGI Homeservices. It trades about 0.25 of its potential returns per unit of risk. ANGI Homeservices is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 166.00 in ANGI Homeservices on November 1, 2024 and sell it today you would earn a total of 22.50 from holding ANGI Homeservices or generate 13.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Match Group vs. ANGI Homeservices
Performance |
| Timeline |
| Match Group |
| ANGI Homeservices |
Match and ANGI Homeservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Match and ANGI Homeservices
The main advantage of trading using opposite Match and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Match position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.The idea behind Match Group and ANGI Homeservices pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ANGI Homeservices vs. Alphabet Inc Class C | ANGI Homeservices vs. Twilio Inc | ANGI Homeservices vs. Snap Inc | ANGI Homeservices vs. Baidu Inc |
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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