Correlation Between Super League and MediaAlpha

Can any of the company-specific risk be diversified away by investing in both Super League and MediaAlpha 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 Super League and MediaAlpha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Super League Enterprise and MediaAlpha, you can compare the effects of market volatilities on Super League and MediaAlpha 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 Super League with a short position of MediaAlpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super League and MediaAlpha.

Diversification Opportunities for Super League and MediaAlpha

0.4

Correlation Coefficient

Super League  MediaAlpha

Very weak diversification

The 3 months correlation between Super and MediaAlpha is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Super League Enterprise and MediaAlpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaAlpha and Super League 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 Super League Enterprise are associated (or correlated) with MediaAlpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaAlpha has no effect on the direction of Super League i.e., Super League and MediaAlpha go up and down completely randomly.

Pair Corralation between Super League and MediaAlpha

Considering the 90-day investment horizon Super League Enterprise is expected to under-perform the MediaAlpha. In addition to that, Super League is 2.02 times more volatile than MediaAlpha. It trades about -0.11 of its total potential returns per unit of risk. MediaAlpha is currently generating about -0.04 per unit of volatility. If you would invest  2,002  in MediaAlpha on February 23, 2024 and sell it today you would lose (224.00) from holding MediaAlpha or give up 11.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Super League Enterprise  vs.  MediaAlpha

Super League Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Super League Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MediaAlpha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MediaAlpha has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Super League and MediaAlpha

The main advantage of trading using opposite Super League and MediaAlpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super League position performs unexpectedly, MediaAlpha 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 MediaAlpha will offset losses from the drop in MediaAlpha's long position.

The idea behind Super League Enterprise and MediaAlpha 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.