Correlation Between Vivid Seats and Meta Platforms

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

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

Diversification Opportunities for Vivid Seats and Meta Platforms

-0.67

Correlation Coefficient

Vivid Seats  Meta Platforms

Excellent diversification

The 3 months correlation between Vivid and Meta is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vivid Seats Warrant and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms 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 Warrant are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Vivid Seats i.e., Vivid Seats and Meta Platforms go up and down completely randomly.

Pair Corralation between Vivid Seats and Meta Platforms

Assuming the 90 days horizon Vivid Seats Warrant is expected to under-perform the Meta Platforms. In addition to that, Vivid Seats is 7.73 times more volatile than Meta Platforms. It trades about -0.05 of its total potential returns per unit of risk. Meta Platforms is currently generating about 0.1 per unit of volatility. If you would invest  52,081  in Meta Platforms on August 30, 2024 and sell it today you would earn a total of  4,839  from holding Meta Platforms or generate 9.29% return on investment over 90 days.

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

Vivid Seats Warrant  vs.  Meta Platforms

Vivid Seats Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivid Seats Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Meta Platforms

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Meta Platforms may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Vivid Seats and Meta Platforms

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

The idea behind Vivid Seats Warrant and Meta Platforms 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.