Correlation Between Taboola and MediaAlpha

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

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

Diversification Opportunities for Taboola and MediaAlpha

-0.33

Correlation Coefficient

Taboola  MediaAlpha

Very good diversification

The 3 months correlation between Taboola and MediaAlpha is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Taboola Ltd Warrant and MediaAlpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaAlpha and Taboola 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 Taboola Ltd Warrant are associated (or correlated) with MediaAlpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaAlpha has no effect on the direction of Taboola i.e., Taboola and MediaAlpha go up and down completely randomly.

Pair Corralation between Taboola and MediaAlpha

Assuming the 90 days horizon Taboola Ltd Warrant is expected to generate 2.51 times more return on investment than MediaAlpha. However, Taboola is 2.51 times more volatile than MediaAlpha. It trades about 0.03 of its potential returns per unit of risk. MediaAlpha is currently generating about 0.06 per unit of risk. If you would invest  69.00  in Taboola Ltd Warrant on February 7, 2024 and sell it today you would lose (37.00) from holding Taboola Ltd Warrant or give up 53.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.19%
Values	Daily Returns

Taboola Ltd Warrant  vs.  MediaAlpha

Taboola Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taboola Ltd Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

MediaAlpha

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MediaAlpha are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, MediaAlpha showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Taboola and MediaAlpha

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

The idea behind Taboola Ltd Warrant and MediaAlpha 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.