Correlation Between Eventbrite and Bumble

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

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

Diversification Opportunities for Eventbrite and Bumble

0.93

Correlation Coefficient

Eventbrite  Bumble

Almost no diversification

The 3 months correlation between Eventbrite and Bumble is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Eventbrite Class A and Bumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumble Inc and Eventbrite 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 Eventbrite Class A are associated (or correlated) with Bumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumble Inc has no effect on the direction of Eventbrite i.e., Eventbrite and Bumble go up and down completely randomly.

Pair Corralation between Eventbrite and Bumble

Allowing for the 90-day total investment horizon Eventbrite is expected to generate 1.22 times less return on investment than Bumble. In addition to that, Eventbrite is 1.09 times more volatile than Bumble Inc. It trades about 0.1 of its total potential returns per unit of risk. Bumble Inc is currently generating about 0.13 per unit of volatility. If you would invest  624.00  in Bumble Inc on September 24, 2024 and sell it today you would earn a total of  158.00  from holding Bumble Inc or generate 25.32% return on investment over 90 days.

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

Eventbrite Class A  vs.  Bumble Inc

Eventbrite Class A

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eventbrite Class A are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Eventbrite sustained solid returns over the last few months and may actually be approaching a breakup point.

Bumble Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bumble Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal fundamental drivers, Bumble disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eventbrite and Bumble

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

The idea behind Eventbrite Class A and Bumble Inc 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 the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.