Correlation Between Vivid Seats and MediaAlpha

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

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

Diversification Opportunities for Vivid Seats and MediaAlpha

0.33

Correlation Coefficient

Vivid Seats  MediaAlpha

Weak diversification

The 3 months correlation between Vivid and MediaAlpha is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vivid Seats and MediaAlpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaAlpha and Vivid Seats 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 Vivid Seats are associated (or correlated) with MediaAlpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaAlpha has no effect on the direction of Vivid Seats i.e., Vivid Seats and MediaAlpha go up and down completely randomly.

Pair Corralation between Vivid Seats and MediaAlpha

Given the investment horizon of 90 days Vivid Seats is expected to under-perform the MediaAlpha. But the stock apears to be less risky and, when comparing its historical volatility, Vivid Seats is 1.31 times less risky than MediaAlpha. The stock trades about -0.03 of its potential returns per unit of risk. The MediaAlpha is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,030  in MediaAlpha on August 30, 2024 and sell it today you would earn a total of  259.00  from holding MediaAlpha or generate 25.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Vivid Seats  vs.  MediaAlpha

Vivid Seats

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivid Seats has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

MediaAlpha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MediaAlpha has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Vivid Seats and MediaAlpha

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

The idea behind Vivid Seats and MediaAlpha 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.