Correlation Between MediaAlpha and Taboola

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

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

Diversification Opportunities for MediaAlpha and Taboola

0.79

Correlation Coefficient

MediaAlpha  Taboola

Poor diversification

The 3 months correlation between MediaAlpha and Taboola is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha and Taboola Ltd Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taboola Warrant and MediaAlpha 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 MediaAlpha are associated (or correlated) with Taboola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taboola Warrant has no effect on the direction of MediaAlpha i.e., MediaAlpha and Taboola go up and down completely randomly.

Pair Corralation between MediaAlpha and Taboola

Considering the 90-day investment horizon MediaAlpha is expected to generate 0.35 times more return on investment than Taboola. However, MediaAlpha is 2.86 times less risky than Taboola. It trades about -0.05 of its potential returns per unit of risk. Taboola Ltd Warrant is currently generating about -0.02 per unit of risk. If you would invest  1,116  in MediaAlpha on December 30, 2024 and sell it today you would lose (181.00) from holding MediaAlpha or give up 16.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

MediaAlpha  vs.  Taboola Ltd Warrant

MediaAlpha

Risk-Adjusted Performance

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 latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Taboola Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taboola Ltd Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with MediaAlpha and Taboola

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

The idea behind MediaAlpha and Taboola Ltd Warrant 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.