Correlation Between Comscore and Locafy

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

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

Diversification Opportunities for Comscore and Locafy

-0.25

Correlation Coefficient

Comscore  Locafy

Very good diversification

The 3 months correlation between Comscore and Locafy is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Comscore and Locafy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locafy and Comscore 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 Comscore are associated (or correlated) with Locafy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locafy has no effect on the direction of Comscore i.e., Comscore and Locafy go up and down completely randomly.

Pair Corralation between Comscore and Locafy

Given the investment horizon of 90 days Comscore is expected to under-perform the Locafy. In addition to that, Comscore is 1.0 times more volatile than Locafy. It trades about -0.07 of its total potential returns per unit of risk. Locafy is currently generating about 0.0 per unit of volatility. If you would invest  740.00  in Locafy on November 29, 2024 and sell it today you would lose (55.00) from holding Locafy or give up 7.43% of portfolio value over 90 days.

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

Comscore  vs.  Locafy

Comscore

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comscore 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.

Locafy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Locafy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Locafy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Comscore and Locafy

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

The idea behind Comscore and Locafy 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.