Correlation Between Direct Digital and Kidoz

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

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

Diversification Opportunities for Direct Digital and Kidoz

-0.27

Correlation Coefficient

Direct Digital  Kidoz

Very good diversification

The 3 months correlation between Direct and Kidoz is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Direct Digital Holdings and Kidoz Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidoz Inc and Direct Digital 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 Direct Digital Holdings are associated (or correlated) with Kidoz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kidoz Inc has no effect on the direction of Direct Digital i.e., Direct Digital and Kidoz go up and down completely randomly.

Pair Corralation between Direct Digital and Kidoz

Given the investment horizon of 90 days Direct Digital Holdings is expected to generate 9.39 times more return on investment than Kidoz. However, Direct Digital is 9.39 times more volatile than Kidoz Inc. It trades about 0.18 of its potential returns per unit of risk. Kidoz Inc is currently generating about 0.09 per unit of risk. If you would invest  101.00  in Direct Digital Holdings on October 9, 2024 and sell it today you would earn a total of  31.00  from holding Direct Digital Holdings or generate 30.69% return on investment over 90 days.

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

Direct Digital Holdings  vs.  Kidoz Inc

Direct Digital Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Direct Digital Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Direct Digital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kidoz Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kidoz Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kidoz reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Direct Digital and Kidoz

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

The idea behind Direct Digital Holdings and Kidoz Inc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.