Correlation Between Match and Genius Sports

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

Diversification Opportunities for Match and Genius Sports

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Match and Genius is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Match Group and Genius Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Sports and Match 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 Match Group are associated (or correlated) with Genius Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Sports has no effect on the direction of Match i.e., Match and Genius Sports go up and down completely randomly.

Pair Corralation between Match and Genius Sports

Given the investment horizon of 90 days Match Group is expected to generate 0.57 times more return on investment than Genius Sports. However, Match Group is 1.75 times less risky than Genius Sports. It trades about 0.0 of its potential returns per unit of risk. Genius Sports is currently generating about -0.03 per unit of risk. If you would invest  9,478  in Match Group on March 28, 2022 and sell it today you would lose (1,633)  from holding Match Group or give up 17.23% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy87.17%
ValuesDaily Returns

Match Group  vs.  Genius Sports

 Performance (%) 
      Timeline 
Match Group 
Match Performance
0 of 100
Over the last 90 days Match Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Structure and Payout Changes

Last Split Factor
3502:1000
Dividend Date
2018-12-19
Ex Dividend Date
2015-11-10
Last Split Date
2020-07-01

Match Price Channel

Genius Sports 
Genius Performance
0 of 100
Over the last 90 days Genius Sports has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Genius Price Channel

Match and Genius Sports Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Match and Genius Sports

The main advantage of trading using opposite Match and Genius Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Match position performs unexpectedly, Genius Sports 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 Genius Sports will offset losses from the drop in Genius Sports' long position.
The idea behind Match Group and Genius Sports 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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