Correlation Between PAR Technology and Dubber

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

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

Diversification Opportunities for PAR Technology and Dubber

0.08

Correlation Coefficient

PAR Technology  Dubber

Significant diversification

The 3 months correlation between PAR and Dubber is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PAR Technology and Dubber Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dubber Limited and PAR Technology 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 PAR Technology 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 PAR Technology i.e., PAR Technology and Dubber go up and down completely randomly.

Pair Corralation between PAR Technology and Dubber

Considering the 90-day investment horizon PAR Technology is expected to generate 13.27 times less return on investment than Dubber. But when comparing it to its historical volatility, PAR Technology is 24.74 times less risky than Dubber. It trades about 0.1 of its potential returns per unit of risk. Dubber Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6.23  in Dubber Limited on October 5, 2024 and sell it today you would lose (3.73) from holding Dubber Limited or give up 59.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

PAR Technology  vs.  Dubber Limited

PAR Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PAR Technology are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, PAR Technology 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 PAR Technology and Dubber

The main advantage of trading using opposite PAR Technology and Dubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAR Technology 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 PAR Technology 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.

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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.