Correlation Between Dubber and PAR Technology

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

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

Diversification Opportunities for Dubber and PAR Technology

0.1

Correlation Coefficient

Dubber  PAR Technology

Average diversification

The 3 months correlation between Dubber and PAR is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dubber Limited and PAR Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAR Technology and Dubber 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 Dubber Limited are associated (or correlated) with PAR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAR Technology has no effect on the direction of Dubber i.e., Dubber and PAR Technology go up and down completely randomly.

Pair Corralation between Dubber and PAR Technology

Assuming the 90 days horizon Dubber Limited is expected to generate 35.44 times more return on investment than PAR Technology. However, Dubber is 35.44 times more volatile than PAR Technology. It trades about 0.08 of its potential returns per unit of risk. PAR Technology is currently generating about 0.19 per unit of risk. If you would invest  2.60  in Dubber Limited on September 22, 2024 and sell it today you would lose (0.10) from holding Dubber Limited or give up 3.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.22%
Values	Daily Returns

Dubber Limited  vs.  PAR Technology

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.

PAR Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PAR Technology are ranked lower than 15 (%) 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.

Pair Trading with Dubber and PAR Technology

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

The idea behind Dubber Limited and PAR Technology 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.