Correlation Between Bumble and NeoMedia Technologies

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

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

Diversification Opportunities for Bumble and NeoMedia Technologies

-0.12

Correlation Coefficient

Bumble  NeoMedia Technologies

Good diversification

The 3 months correlation between Bumble and NeoMedia is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bumble Inc and NeoMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoMedia Technologies and Bumble 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 Bumble Inc are associated (or correlated) with NeoMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoMedia Technologies has no effect on the direction of Bumble i.e., Bumble and NeoMedia Technologies go up and down completely randomly.

Pair Corralation between Bumble and NeoMedia Technologies

If you would invest  676.00  in Bumble Inc on September 2, 2024 and sell it today you would earn a total of  193.00  from holding Bumble Inc or generate 28.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Bumble Inc  vs.  NeoMedia Technologies

Bumble Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bumble Inc are ranked lower than 11 (%) 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.

NeoMedia Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NeoMedia Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, NeoMedia Technologies is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bumble and NeoMedia Technologies

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

The idea behind Bumble Inc and NeoMedia Technologies 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.