Correlation Between Dubber and Workiva

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

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

Diversification Opportunities for Dubber and Workiva

0.01

Correlation Coefficient

Dubber  Workiva

Significant diversification

The 3 months correlation between Dubber and Workiva is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dubber Limited and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva 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 Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of Dubber i.e., Dubber and Workiva go up and down completely randomly.

Pair Corralation between Dubber and Workiva

Assuming the 90 days horizon Dubber Limited is expected to generate 44.69 times more return on investment than Workiva. However, Dubber is 44.69 times more volatile than Workiva. It trades about 0.08 of its potential returns per unit of risk. Workiva is currently generating about 0.15 per unit of risk. If you would invest  2.60  in Dubber Limited on October 13, 2024 and sell it today you would lose (0.10) from holding Dubber Limited or give up 3.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.95%
Values	Daily Returns

Dubber Limited  vs.  Workiva

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.

Workiva

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Workiva are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward-looking signals, Workiva disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dubber and Workiva

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

The idea behind Dubber Limited and Workiva 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.