Correlation Between Elcom International and DoubleVerify Holdings

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

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

Diversification Opportunities for Elcom International and DoubleVerify Holdings

-0.64

Correlation Coefficient

Elcom International  DoubleVerify Holdings

Excellent diversification

The 3 months correlation between Elcom and DoubleVerify is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Elcom International and DoubleVerify Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleVerify Holdings and Elcom International 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 Elcom International are associated (or correlated) with DoubleVerify Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleVerify Holdings has no effect on the direction of Elcom International i.e., Elcom International and DoubleVerify Holdings go up and down completely randomly.

Pair Corralation between Elcom International and DoubleVerify Holdings

If you would invest  1,937  in DoubleVerify Holdings on September 1, 2024 and sell it today you would earn a total of  96.00  from holding DoubleVerify Holdings or generate 4.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Elcom International  vs.  DoubleVerify Holdings

Elcom International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elcom International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Elcom International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

DoubleVerify Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleVerify Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, DoubleVerify Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Elcom International and DoubleVerify Holdings

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

The idea behind Elcom International and DoubleVerify Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.