Correlation Between Mirriad Advertising and Travelzoo

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

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

Diversification Opportunities for Mirriad Advertising and Travelzoo

-0.63

Correlation Coefficient

Mirriad Advertising  Travelzoo

Excellent diversification

The 3 months correlation between Mirriad and Travelzoo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mirriad Advertising plc and Travelzoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travelzoo and Mirriad Advertising 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 Mirriad Advertising plc are associated (or correlated) with Travelzoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travelzoo has no effect on the direction of Mirriad Advertising i.e., Mirriad Advertising and Travelzoo go up and down completely randomly.

Pair Corralation between Mirriad Advertising and Travelzoo

Assuming the 90 days horizon Mirriad Advertising plc is expected to under-perform the Travelzoo. In addition to that, Mirriad Advertising is 1.94 times more volatile than Travelzoo. It trades about -0.18 of its total potential returns per unit of risk. Travelzoo is currently generating about 0.22 per unit of volatility. If you would invest  1,207  in Travelzoo on August 30, 2024 and sell it today you would earn a total of  840.00  from holding Travelzoo or generate 69.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Mirriad Advertising plc  vs.  Travelzoo

Mirriad Advertising plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirriad Advertising plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Travelzoo

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Travelzoo are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Travelzoo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mirriad Advertising and Travelzoo

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

The idea behind Mirriad Advertising plc and Travelzoo 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 CEOs Directory module to screen CEOs from public companies around the world.