Correlation Between Dubber and AudioEye

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Can any of the company-specific risk be diversified away by investing in both Dubber and AudioEye 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 Dubber and AudioEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dubber Limited and AudioEye, you can compare the effects of market volatilities on Dubber and AudioEye 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 Dubber with a short position of AudioEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dubber and AudioEye.

Diversification Opportunities for Dubber and AudioEye

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Dubber and AudioEye is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dubber Limited and AudioEye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioEye and Dubber 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 Dubber Limited are associated (or correlated) with AudioEye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioEye has no effect on the direction of Dubber i.e., Dubber and AudioEye go up and down completely randomly.

Pair Corralation between Dubber and AudioEye

Assuming the 90 days horizon Dubber Limited is expected to generate 13.23 times more return on investment than AudioEye. However, Dubber is 13.23 times more volatile than AudioEye. It trades about 0.08 of its potential returns per unit of risk. AudioEye is currently generating about 0.03 per unit of risk. If you would invest  2.60  in Dubber Limited on September 25, 2024 and sell it today you would lose (0.66) from holding Dubber Limited or give up 25.38% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.21%
ValuesDaily Returns

Dubber Limited  vs.  AudioEye

 Performance 
       Timeline  
Dubber Limited 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Dubber Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Dubber reported solid returns over the last few months and may actually be approaching a breakup point.
AudioEye 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AudioEye 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 basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Dubber and AudioEye Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dubber and AudioEye

The main advantage of trading using opposite Dubber and AudioEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dubber position performs unexpectedly, AudioEye 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 AudioEye will offset losses from the drop in AudioEye's long position.
The idea behind Dubber Limited and AudioEye 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.
Check out your portfolio center.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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