Correlation Between Match and Fiverr International

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

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

Diversification Opportunities for Match and Fiverr International

0.6

Correlation Coefficient

Match  Fiverr International

Poor diversification

The 3 months correlation between Match and Fiverr is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Match Group and Fiverr International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiverr International and Match 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 Match Group are associated (or correlated) with Fiverr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiverr International has no effect on the direction of Match i.e., Match and Fiverr International go up and down completely randomly.

Pair Corralation between Match and Fiverr International

Given the investment horizon of 90 days Match Group is expected to under-perform the Fiverr International. But the stock apears to be less risky and, when comparing its historical volatility, Match Group is 1.51 times less risky than Fiverr International. The stock trades about -0.15 of its potential returns per unit of risk. The Fiverr International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,974  in Fiverr International on February 7, 2024 and sell it today you would earn a total of  146.00  from holding Fiverr International or generate 7.4% return on investment over 90 days.

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

Match Group  vs.  Fiverr International

Match Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Match Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Fiverr International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fiverr International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Match and Fiverr International

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

The idea behind Match Group and Fiverr International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.