Correlation Between Duos Technologies and Shotspotter

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

By analyzing existing cross correlation between Duos Technologies Group and Shotspotter, you can compare the effects of market volatilities on Duos Technologies and Shotspotter 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 Duos Technologies with a short position of Shotspotter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duos Technologies and Shotspotter.

Diversification Opportunities for Duos Technologies and Shotspotter

-0.2

Correlation Coefficient

Duos Technologies  Shotspotter

Good diversification

The 3 months correlation between Duos and Shotspotter is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Duos Technologies Group and Shotspotter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shotspotter and Duos Technologies 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 Duos Technologies Group are associated (or correlated) with Shotspotter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shotspotter has no effect on the direction of Duos Technologies i.e., Duos Technologies and Shotspotter go up and down completely randomly.

Pair Corralation between Duos Technologies and Shotspotter

Given the investment horizon of 90 days Duos Technologies is expected to generate 153.82 times less return on investment than Shotspotter. In addition to that, Duos Technologies is 1.59 times more volatile than Shotspotter. It trades about 0.0 of its total potential returns per unit of risk. Shotspotter is currently generating about 0.13 per unit of volatility. If you would invest  1,285  in Shotspotter on December 30, 2024 and sell it today you would earn a total of  459.00  from holding Shotspotter or generate 35.72% return on investment over 90 days.

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

Duos Technologies Group  vs.  Shotspotter

Duos Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duos Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Duos Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Shotspotter

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shotspotter are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Shotspotter demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Duos Technologies and Shotspotter

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

The idea behind Duos Technologies Group and Shotspotter 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.