Correlation Between Smartsheet and Dubber

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

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

Diversification Opportunities for Smartsheet and Dubber

0.16

Correlation Coefficient

Smartsheet  Dubber

Average diversification

The 3 months correlation between Smartsheet and Dubber is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Smartsheet and Dubber Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dubber Limited and Smartsheet 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 Smartsheet 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 Smartsheet i.e., Smartsheet and Dubber go up and down completely randomly.

Pair Corralation between Smartsheet and Dubber

Given the investment horizon of 90 days Smartsheet is expected to generate 12.71 times less return on investment than Dubber. But when comparing it to its historical volatility, Smartsheet is 18.15 times less risky than Dubber. It trades about 0.05 of its potential returns per unit of risk. Dubber Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  31.00  in Dubber Limited on September 26, 2024 and sell it today you would lose (28.50) from holding Dubber Limited or give up 91.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Smartsheet  vs.  Dubber Limited

Smartsheet

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Smartsheet are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Smartsheet is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

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 abnormal basic indicators, Dubber reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smartsheet and Dubber

The main advantage of trading using opposite Smartsheet and Dubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartsheet 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 Smartsheet 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.