Correlation Between TechTarget and Yelp
Can any of the company-specific risk be diversified away by investing in both TechTarget and Yelp 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 TechTarget and Yelp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechTarget and Yelp Inc, you can compare the effects of market volatilities on TechTarget and Yelp 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 TechTarget with a short position of Yelp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechTarget and Yelp.
Diversification Opportunities for TechTarget and Yelp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TechTarget and Yelp is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding TechTarget and Yelp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelp Inc and TechTarget 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 TechTarget are associated (or correlated) with Yelp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelp Inc has no effect on the direction of TechTarget i.e., TechTarget and Yelp go up and down completely randomly.
Pair Corralation between TechTarget and Yelp
Given the investment horizon of 90 days TechTarget is expected to generate 1.61 times more return on investment than Yelp. However, TechTarget is 1.61 times more volatile than Yelp Inc. It trades about 0.17 of its potential returns per unit of risk. Yelp Inc is currently generating about 0.23 per unit of risk. If you would invest 2,975 in TechTarget on August 28, 2024 and sell it today you would earn a total of 344.00 from holding TechTarget or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TechTarget vs. Yelp Inc
Performance |
| Timeline |
| TechTarget |
| Yelp Inc |
TechTarget and Yelp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechTarget and Yelp
The main advantage of trading using opposite TechTarget and Yelp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechTarget position performs unexpectedly, Yelp 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 Yelp will offset losses from the drop in Yelp's long position.| TechTarget vs. Sabio Holdings | TechTarget vs. Comscore | TechTarget vs. Outbrain | TechTarget vs. Rightmove Plc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |