Correlation Between Genius Sports and Match

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

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

Diversification Opportunities for Genius Sports and Match

0.64

Correlation Coefficient

Genius Sports  Match

Poor diversification

The 3 months correlation between Genius and Match is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Genius Sports and Match Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Match Group and Genius Sports 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 Genius Sports are associated (or correlated) with Match. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Match Group has no effect on the direction of Genius Sports i.e., Genius Sports and Match go up and down completely randomly.

Pair Corralation between Genius Sports and Match

Given the investment horizon of 90 days Genius Sports is expected to generate 1.41 times more return on investment than Match. However, Genius Sports is 1.41 times more volatile than Match Group. It trades about 0.06 of its potential returns per unit of risk. Match Group is currently generating about -0.05 per unit of risk. If you would invest  264.00  in Genius Sports on January 25, 2024 and sell it today you would earn a total of  259.00  from holding Genius Sports or generate 98.11% return on investment over 90 days.

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

Genius Sports  vs.  Match Group

Genius Sports

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genius Sports has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Match Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Match Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Genius Sports and Match

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

The idea behind Genius Sports and Match Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.