Correlation Between Dubber and Riskified

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

By analyzing existing cross correlation between Dubber Limited and Riskified, you can compare the effects of market volatilities on Dubber and Riskified 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 Riskified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dubber and Riskified.

Diversification Opportunities for Dubber and Riskified

0.04

Correlation Coefficient

Dubber  Riskified

Significant diversification

The 3 months correlation between Dubber and Riskified is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dubber Limited and Riskified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riskified 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 Riskified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riskified has no effect on the direction of Dubber i.e., Dubber and Riskified go up and down completely randomly.

Pair Corralation between Dubber and Riskified

Assuming the 90 days horizon Dubber Limited is expected to generate 23.55 times more return on investment than Riskified. However, Dubber is 23.55 times more volatile than Riskified. It trades about 0.05 of its potential returns per unit of risk. Riskified is currently generating about 0.03 per unit of risk. If you would invest  6.23  in Dubber Limited on October 5, 2024 and sell it today you would lose (3.73) from holding Dubber Limited or give up 59.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Dubber Limited  vs.  Riskified

Dubber Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dubber Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dubber reported solid returns over the last few months and may actually be approaching a breakup point.

Riskified

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Riskified are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, Riskified may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dubber and Riskified

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

The idea behind Dubber Limited and Riskified 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.