Correlation Between Dubber and Sprout Social

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

Diversification Opportunities for Dubber and Sprout Social

0.04
  Correlation Coefficient

Significant diversification

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

Pair Corralation between Dubber and Sprout Social

Assuming the 90 days horizon Dubber Limited is expected to generate 16.4 times more return on investment than Sprout Social. However, Dubber is 16.4 times more volatile than Sprout Social. It trades about 0.05 of its potential returns per unit of risk. Sprout Social is currently generating about -0.03 per unit of risk. If you would invest  17.00  in Dubber Limited on September 23, 2024 and sell it today you would lose (14.50) from holding Dubber Limited or give up 85.29% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.63%
ValuesDaily Returns

Dubber Limited  vs.  Sprout Social

 Performance 
       Timeline  
Dubber Limited 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
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 abnormal basic indicators, Dubber reported solid returns over the last few months and may actually be approaching a breakup point.
Sprout Social 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Sprout Social are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Sprout Social unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dubber and Sprout Social Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dubber and Sprout Social

The main advantage of trading using opposite Dubber and Sprout Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dubber position performs unexpectedly, Sprout Social 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 Sprout Social will offset losses from the drop in Sprout Social's long position.
The idea behind Dubber Limited and Sprout Social 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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