Correlation Between Cardlytics and QuinStreet

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

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

Diversification Opportunities for Cardlytics and QuinStreet

0.56

Correlation Coefficient

Cardlytics  QuinStreet

Very weak diversification

The 3 months correlation between Cardlytics and QuinStreet is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cardlytics and QuinStreet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuinStreet and Cardlytics 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 Cardlytics are associated (or correlated) with QuinStreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuinStreet has no effect on the direction of Cardlytics i.e., Cardlytics and QuinStreet go up and down completely randomly.

Pair Corralation between Cardlytics and QuinStreet

Given the investment horizon of 90 days Cardlytics is expected to generate 1.54 times less return on investment than QuinStreet. In addition to that, Cardlytics is 1.85 times more volatile than QuinStreet. It trades about 0.03 of its total potential returns per unit of risk. QuinStreet is currently generating about 0.08 per unit of volatility. If you would invest  1,974  in QuinStreet on September 17, 2024 and sell it today you would earn a total of  237.00  from holding QuinStreet or generate 12.01% return on investment over 90 days.

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

Cardlytics  vs.  QuinStreet

Cardlytics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cardlytics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Cardlytics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

QuinStreet

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QuinStreet are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, QuinStreet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cardlytics and QuinStreet

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

The idea behind Cardlytics and QuinStreet 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.