Correlation Between DHI and Eventbrite

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

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

Diversification Opportunities for DHI and Eventbrite

0.62

Correlation Coefficient

DHI  Eventbrite

Poor diversification

The 3 months correlation between DHI and Eventbrite is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DHI Group and Eventbrite Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventbrite Class A and DHI 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 DHI Group are associated (or correlated) with Eventbrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventbrite Class A has no effect on the direction of DHI i.e., DHI and Eventbrite go up and down completely randomly.

Pair Corralation between DHI and Eventbrite

Considering the 90-day investment horizon DHI Group is expected to generate 1.47 times more return on investment than Eventbrite. However, DHI is 1.47 times more volatile than Eventbrite Class A. It trades about 0.01 of its potential returns per unit of risk. Eventbrite Class A is currently generating about -0.14 per unit of risk. If you would invest  180.00  in DHI Group on December 27, 2024 and sell it today you would lose (14.00) from holding DHI Group or give up 7.78% of portfolio value over 90 days.

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

DHI Group  vs.  Eventbrite Class A

DHI Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days DHI Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, DHI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Eventbrite Class A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eventbrite Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with DHI and Eventbrite

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

The idea behind DHI Group and Eventbrite Class A 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.