Correlation Between Bluecity Holdings and Mediaalpha Inc

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

Diversification Opportunities for Bluecity Holdings and Mediaalpha Inc

0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between Bluecity and Mediaalpha is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bluecity Holdings Ltd and Mediaalpha Inc Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaalpha Inc and Bluecity Holdings 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 Bluecity Holdings 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 Bluecity Holdings i.e., Bluecity Holdings and Mediaalpha Inc go up and down completely randomly.

Pair Corralation between Bluecity Holdings and Mediaalpha Inc

Given the investment horizon of 90 days Bluecity Holdings is expected to generate 0.18 times more return on investment than Mediaalpha Inc. However, Bluecity Holdings is 5.49 times less risky than Mediaalpha Inc. It trades about 0.15 of its potential returns per unit of risk. Mediaalpha Inc Cl is currently generating about -0.14 per unit of risk. If you would invest  149.00  in Bluecity Holdings on May 17, 2022 and sell it today you would earn a total of  5.00  from holding Bluecity Holdings or generate 3.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Bluecity Holdings Ltd  vs.  Mediaalpha Inc Cl

 Performance (%) 
       Timeline  
Bluecity Holdings 
Bluecity Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bluecity Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Bluecity Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bluecity 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 weak 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

Bluecity Holdings and Mediaalpha Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bluecity Holdings and Mediaalpha Inc

The main advantage of trading using opposite Bluecity Holdings and Mediaalpha Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluecity Holdings 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.
The idea behind Bluecity Holdings 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.
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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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