Correlation Between Vivid Seats and Genius Sports

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

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

Diversification Opportunities for Vivid Seats and Genius Sports

-0.57

Correlation Coefficient

Vivid Seats  Genius Sports

Excellent diversification

The 3 months correlation between Vivid and Genius is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vivid Seats and Genius Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Sports and Vivid Seats 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 Vivid Seats are associated (or correlated) with Genius Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Sports has no effect on the direction of Vivid Seats i.e., Vivid Seats and Genius Sports go up and down completely randomly.

Pair Corralation between Vivid Seats and Genius Sports

Given the investment horizon of 90 days Vivid Seats is expected to under-perform the Genius Sports. In addition to that, Vivid Seats is 1.18 times more volatile than Genius Sports. It trades about -0.17 of its total potential returns per unit of risk. Genius Sports is currently generating about 0.13 per unit of volatility. If you would invest  862.00  in Genius Sports on December 28, 2024 and sell it today you would earn a total of  222.00  from holding Genius Sports or generate 25.75% return on investment over 90 days.

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

Vivid Seats  vs.  Genius Sports

Vivid Seats

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivid Seats has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Genius Sports

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genius Sports are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Genius Sports demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vivid Seats and Genius Sports

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

The idea behind Vivid Seats and Genius Sports 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.