Correlation Between Match and Shutterstock
Can any of the company-specific risk be diversified away by investing in both Match and Shutterstock 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 Shutterstock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Match Group and Shutterstock, you can compare the effects of market volatilities on Match and Shutterstock 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 Shutterstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Match and Shutterstock.
Diversification Opportunities for Match and Shutterstock
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Match and Shutterstock is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Match Group and Shutterstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shutterstock 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 Shutterstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shutterstock has no effect on the direction of Match i.e., Match and Shutterstock go up and down completely randomly.
Pair Corralation between Match and Shutterstock
Given the investment horizon of 90 days Match Group is expected to generate 0.32 times more return on investment than Shutterstock. However, Match Group is 3.1 times less risky than Shutterstock. It trades about 0.22 of its potential returns per unit of risk. Shutterstock is currently generating about 0.01 per unit of risk. If you would invest 3,338 in Match Group on November 5, 2024 and sell it today you would earn a total of 232.00 from holding Match Group or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Match Group vs. Shutterstock
Performance |
| Timeline |
| Match Group |
| Shutterstock |
Match and Shutterstock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Match and Shutterstock
The main advantage of trading using opposite Match and Shutterstock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Match position performs unexpectedly, Shutterstock 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 Shutterstock will offset losses from the drop in Shutterstock's long position.The idea behind Match Group and Shutterstock 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.| Shutterstock vs. Yelp Inc | Shutterstock vs. Match Group | Shutterstock vs. Snap Inc | Shutterstock vs. Onfolio Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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