Correlation Between DoubleVerify Holdings and Nerdy

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

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

Diversification Opportunities for DoubleVerify Holdings and Nerdy

0.44

Correlation Coefficient

DoubleVerify Holdings  Nerdy

Very weak diversification

The 3 months correlation between DoubleVerify and Nerdy is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding DoubleVerify Holdings and Nerdy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nerdy Inc and DoubleVerify Holdings 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 DoubleVerify Holdings are associated (or correlated) with Nerdy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nerdy Inc has no effect on the direction of DoubleVerify Holdings i.e., DoubleVerify Holdings and Nerdy go up and down completely randomly.

Pair Corralation between DoubleVerify Holdings and Nerdy

Allowing for the 90-day total investment horizon DoubleVerify Holdings is expected to under-perform the Nerdy. In addition to that, DoubleVerify Holdings is 1.04 times more volatile than Nerdy Inc. It trades about -0.08 of its total potential returns per unit of risk. Nerdy Inc is currently generating about 0.03 per unit of volatility. If you would invest  153.00  in Nerdy Inc on December 4, 2024 and sell it today you would earn a total of  3.00  from holding Nerdy Inc or generate 1.96% return on investment over 90 days.

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

DoubleVerify Holdings  vs.  Nerdy Inc

DoubleVerify Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days DoubleVerify Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Nerdy Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nerdy Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Nerdy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with DoubleVerify Holdings and Nerdy

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

The idea behind DoubleVerify Holdings and Nerdy Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.