Correlation Between Mediaco Holding and Bridgeline Digital

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

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

Diversification Opportunities for Mediaco Holding and Bridgeline Digital

-0.22

Correlation Coefficient

Mediaco Holding  Bridgeline Digital

Very good diversification

The 3 months correlation between Mediaco and Bridgeline is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mediaco Holding and Bridgeline Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgeline Digital and Mediaco Holding 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 Mediaco Holding are associated (or correlated) with Bridgeline Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgeline Digital has no effect on the direction of Mediaco Holding i.e., Mediaco Holding and Bridgeline Digital go up and down completely randomly.

Pair Corralation between Mediaco Holding and Bridgeline Digital

Given the investment horizon of 90 days Mediaco Holding is expected to generate 2.25 times less return on investment than Bridgeline Digital. But when comparing it to its historical volatility, Mediaco Holding is 2.07 times less risky than Bridgeline Digital. It trades about 0.03 of its potential returns per unit of risk. Bridgeline Digital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  146.00  in Bridgeline Digital on December 22, 2024 and sell it today you would lose (2.00) from holding Bridgeline Digital or give up 1.37% of portfolio value over 90 days.

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

Mediaco Holding  vs.  Bridgeline Digital

Mediaco Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mediaco Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Mediaco Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bridgeline Digital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgeline Digital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Bridgeline Digital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mediaco Holding and Bridgeline Digital

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

The idea behind Mediaco Holding and Bridgeline Digital 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.