Correlation Between Intouch Insight and Dubber

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

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

Diversification Opportunities for Intouch Insight and Dubber

0.0

Correlation Coefficient

Intouch Insight  Dubber

Pay attention - limited upside

The 3 months correlation between Intouch and Dubber is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Intouch Insight and Dubber Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dubber Limited and Intouch Insight 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 Intouch Insight are associated (or correlated) with Dubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dubber Limited has no effect on the direction of Intouch Insight i.e., Intouch Insight and Dubber go up and down completely randomly.

Pair Corralation between Intouch Insight and Dubber

Assuming the 90 days horizon Intouch Insight is expected to generate 15.86 times less return on investment than Dubber. But when comparing it to its historical volatility, Intouch Insight is 17.56 times less risky than Dubber. It trades about 0.13 of its potential returns per unit of risk. Dubber Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1.48  in Dubber Limited on October 21, 2024 and sell it today you would earn a total of  1.02  from holding Dubber Limited or generate 68.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Intouch Insight  vs.  Dubber Limited

Intouch Insight

Risk-Adjusted Performance

10 of 100

OK

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

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.

Pair Trading with Intouch Insight and Dubber

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

The idea behind Intouch Insight and Dubber Limited 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.