Correlation Between NATIONAL and Doubledown Interactive

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

By analyzing existing cross correlation between NATIONAL RURAL UTILS and Doubledown Interactive Co, you can compare the effects of market volatilities on NATIONAL and Doubledown Interactive 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 NATIONAL with a short position of Doubledown Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL and Doubledown Interactive.

Diversification Opportunities for NATIONAL and Doubledown Interactive

0.27

Correlation Coefficient

NATIONAL  Doubledown Interactive

Modest diversification

The 3 months correlation between NATIONAL and Doubledown is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL RURAL UTILS and Doubledown Interactive Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubledown Interactive and NATIONAL 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 NATIONAL RURAL UTILS are associated (or correlated) with Doubledown Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubledown Interactive has no effect on the direction of NATIONAL i.e., NATIONAL and Doubledown Interactive go up and down completely randomly.

Pair Corralation between NATIONAL and Doubledown Interactive

Assuming the 90 days trading horizon NATIONAL RURAL UTILS is expected to generate 0.34 times more return on investment than Doubledown Interactive. However, NATIONAL RURAL UTILS is 2.9 times less risky than Doubledown Interactive. It trades about -0.08 of its potential returns per unit of risk. Doubledown Interactive Co is currently generating about -0.04 per unit of risk. If you would invest  8,962  in NATIONAL RURAL UTILS on September 12, 2024 and sell it today you would lose (231.00) from holding NATIONAL RURAL UTILS or give up 2.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	37.5%
Values	Daily Returns

NATIONAL RURAL UTILS  vs.  Doubledown Interactive Co

NATIONAL RURAL UTILS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NATIONAL RURAL UTILS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NATIONAL RURAL UTILS investors.

Doubledown Interactive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubledown Interactive Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with NATIONAL and Doubledown Interactive

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

The idea behind NATIONAL RURAL UTILS and Doubledown Interactive Co 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.