Correlation Between BuzzFeed and LIZI Old

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

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

Diversification Opportunities for BuzzFeed and LIZI Old

0.0

Correlation Coefficient

BuzzFeed  LIZI Old

Pay attention - limited upside

The 3 months correlation between BuzzFeed and LIZI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BuzzFeed and LIZI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIZI Old and BuzzFeed 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 BuzzFeed are associated (or correlated) with LIZI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIZI Old has no effect on the direction of BuzzFeed i.e., BuzzFeed and LIZI Old go up and down completely randomly.

Pair Corralation between BuzzFeed and LIZI Old

If you would invest  240.00  in BuzzFeed on October 24, 2024 and sell it today you would earn a total of  17.00  from holding BuzzFeed or generate 7.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

BuzzFeed  vs.  LIZI Old

BuzzFeed

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BuzzFeed are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, BuzzFeed exhibited solid returns over the last few months and may actually be approaching a breakup point.

LIZI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIZI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, LIZI Old is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BuzzFeed and LIZI Old

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

The idea behind BuzzFeed and LIZI Old 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.