Correlation Between Mediaco Holding and VerifyMe

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

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

Diversification Opportunities for Mediaco Holding and VerifyMe

-0.48

Correlation Coefficient

Mediaco Holding  VerifyMe

Very good diversification

The 3 months correlation between Mediaco and VerifyMe is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mediaco Holding and VerifyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VerifyMe 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 VerifyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VerifyMe has no effect on the direction of Mediaco Holding i.e., Mediaco Holding and VerifyMe go up and down completely randomly.

Pair Corralation between Mediaco Holding and VerifyMe

Given the investment horizon of 90 days Mediaco Holding is expected to generate 19.08 times less return on investment than VerifyMe. But when comparing it to its historical volatility, Mediaco Holding is 4.82 times less risky than VerifyMe. It trades about 0.01 of its potential returns per unit of risk. VerifyMe is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  79.00  in VerifyMe on December 30, 2024 and sell it today you would lose (12.00) from holding VerifyMe or give up 15.19% of portfolio value over 90 days.

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

Mediaco Holding  vs.  VerifyMe

Mediaco Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mediaco Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Mediaco Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

VerifyMe

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VerifyMe are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, VerifyMe exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mediaco Holding and VerifyMe

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

The idea behind Mediaco Holding and VerifyMe 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.