Correlation Between MediaAlpha and Match

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

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

Diversification Opportunities for MediaAlpha and Match

-0.48

Correlation Coefficient

MediaAlpha  Match

Very good diversification

The 3 months correlation between MediaAlpha and Match is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha and Match Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Match Group and MediaAlpha 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 MediaAlpha 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 MediaAlpha i.e., MediaAlpha and Match go up and down completely randomly.

Pair Corralation between MediaAlpha and Match

Considering the 90-day investment horizon MediaAlpha is expected to generate 1.33 times more return on investment than Match. However, MediaAlpha is 1.33 times more volatile than Match Group. It trades about -0.08 of its potential returns per unit of risk. Match Group is currently generating about -0.23 per unit of risk. If you would invest  2,011  in MediaAlpha on January 20, 2024 and sell it today you would lose (107.00) from holding MediaAlpha or give up 5.32% of portfolio value over 90 days.

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

MediaAlpha  vs.  Match Group

MediaAlpha

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MediaAlpha are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, MediaAlpha showed solid returns over the last few months and may actually be approaching a breakup point.

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 latest unfluctuating performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with MediaAlpha and Match

The main advantage of trading using opposite MediaAlpha and Match positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaAlpha 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 MediaAlpha 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 Stocks Directory module to find actively traded stocks across global markets.