Correlation Between Creative Realities and Kubient

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

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

Diversification Opportunities for Creative Realities and Kubient

0.25

Correlation Coefficient

Creative Realities  Kubient

Modest diversification

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

Pair Corralation between Creative Realities and Kubient

Given the investment horizon of 90 days Creative Realities is expected to generate 0.59 times more return on investment than Kubient. However, Creative Realities is 1.7 times less risky than Kubient. It trades about 0.04 of its potential returns per unit of risk. Kubient is currently generating about 0.02 per unit of risk. If you would invest  171.00  in Creative Realities on September 28, 2024 and sell it today you would earn a total of  98.00  from holding Creative Realities or generate 57.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	27.42%
Values	Daily Returns

Creative Realities  vs.  Kubient

Creative Realities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creative Realities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kubient

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kubient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Kubient is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Creative Realities and Kubient

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

The idea behind Creative Realities and Kubient 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.