Correlation Between Arena and Mediaalpha Inc

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Can any of the company-specific risk be diversified away by investing in both Arena and Mediaalpha Inc 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 Arena and Mediaalpha Inc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arena Group and Mediaalpha Inc Cl, you can compare the effects of market volatilities on Arena and Mediaalpha Inc 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 Arena with a short position of Mediaalpha Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena and Mediaalpha Inc.

Diversification Opportunities for Arena and Mediaalpha Inc

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Arena and Mediaalpha is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding The Arena Group and Mediaalpha Inc Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaalpha Inc and Arena 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 The Arena Group are associated (or correlated) with Mediaalpha Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaalpha Inc has no effect on the direction of Arena i.e., Arena and Mediaalpha Inc go up and down completely randomly.

Pair Corralation between Arena and Mediaalpha Inc

Given the investment horizon of 90 days The Arena Group is expected to generate 1.27 times more return on investment than Mediaalpha Inc. However, Arena is 1.27 times more volatile than Mediaalpha Inc Cl. It trades about 0.06 of its potential returns per unit of risk. Mediaalpha Inc Cl is currently generating about -0.04 per unit of risk. If you would invest  1,082  in The Arena Group on June 28, 2022 and sell it today you would earn a total of  116.00  from holding The Arena Group or generate 10.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

The Arena Group  vs.  Mediaalpha Inc Cl

 Performance (%) 
       Timeline  
Arena Group 
Arena Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in The Arena Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish technical and fundamental indicators, Arena disclosed solid returns over the last few months and may actually be approaching a breakup point.

Arena Price Channel

Mediaalpha Inc 
Mediaalpha Performance
0 of 100
Over the last 90 days Mediaalpha Inc Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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.

Mediaalpha Price Channel

Arena and Mediaalpha Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arena and Mediaalpha Inc

The main advantage of trading using opposite Arena and Mediaalpha Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena position performs unexpectedly, Mediaalpha Inc 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 Inc will offset losses from the drop in Mediaalpha Inc's long position.
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The idea behind The Arena Group and Mediaalpha Inc Cl 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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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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