Correlation Between Fiverr International and Vivid Seats

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

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

Diversification Opportunities for Fiverr International and Vivid Seats

-0.34

Correlation Coefficient

Fiverr International  Vivid Seats

Very good diversification

The 3 months correlation between Fiverr and Vivid is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and Vivid Seats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivid Seats and Fiverr International 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 Fiverr International are associated (or correlated) with Vivid Seats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivid Seats has no effect on the direction of Fiverr International i.e., Fiverr International and Vivid Seats go up and down completely randomly.

Pair Corralation between Fiverr International and Vivid Seats

Given the investment horizon of 90 days Fiverr International is expected to under-perform the Vivid Seats. But the stock apears to be less risky and, when comparing its historical volatility, Fiverr International is 1.24 times less risky than Vivid Seats. The stock trades about -0.11 of its potential returns per unit of risk. The Vivid Seats is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  358.00  in Vivid Seats on November 29, 2024 and sell it today you would earn a total of  57.00  from holding Vivid Seats or generate 15.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fiverr International  vs.  Vivid Seats

Fiverr International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiverr International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Vivid Seats

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vivid Seats are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Vivid Seats unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fiverr International and Vivid Seats

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

The idea behind Fiverr International and Vivid Seats 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.