Correlation Between Workiva and DoubleVerify Holdings

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

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

Diversification Opportunities for Workiva and DoubleVerify Holdings

0.41

Correlation Coefficient

Workiva  DoubleVerify Holdings

Very weak diversification

The 3 months correlation between Workiva and DoubleVerify is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and DoubleVerify Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleVerify Holdings and Workiva 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 Workiva 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 Workiva i.e., Workiva and DoubleVerify Holdings go up and down completely randomly.

Pair Corralation between Workiva and DoubleVerify Holdings

Allowing for the 90-day total investment horizon Workiva is expected to under-perform the DoubleVerify Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Workiva is 1.75 times less risky than DoubleVerify Holdings. The stock trades about -0.17 of its potential returns per unit of risk. The DoubleVerify Holdings is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,937  in DoubleVerify Holdings on December 30, 2024 and sell it today you would lose (603.00) from holding DoubleVerify Holdings or give up 31.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Workiva  vs.  DoubleVerify Holdings

Workiva

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workiva has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

DoubleVerify Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days DoubleVerify Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Workiva and DoubleVerify Holdings

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

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.