Correlation Between DoubleVerify Holdings and Taitron Components

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

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

Diversification Opportunities for DoubleVerify Holdings and Taitron Components

-0.38

Correlation Coefficient

DoubleVerify Holdings  Taitron Components

Very good diversification

The 3 months correlation between DoubleVerify and Taitron is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding DoubleVerify Holdings and Taitron Components Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taitron Components and DoubleVerify Holdings 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 DoubleVerify Holdings are associated (or correlated) with Taitron Components. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taitron Components has no effect on the direction of DoubleVerify Holdings i.e., DoubleVerify Holdings and Taitron Components go up and down completely randomly.

Pair Corralation between DoubleVerify Holdings and Taitron Components

Allowing for the 90-day total investment horizon DoubleVerify Holdings is expected to generate 1.65 times more return on investment than Taitron Components. However, DoubleVerify Holdings is 1.65 times more volatile than Taitron Components Incorporated. It trades about 0.03 of its potential returns per unit of risk. Taitron Components Incorporated is currently generating about -0.04 per unit of risk. If you would invest  1,970  in DoubleVerify Holdings on August 30, 2024 and sell it today you would earn a total of  65.00  from holding DoubleVerify Holdings or generate 3.3% return on investment over 90 days.

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

DoubleVerify Holdings  vs.  Taitron Components Incorporate

DoubleVerify Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleVerify Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, DoubleVerify Holdings is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Taitron Components

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taitron Components Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Taitron Components is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with DoubleVerify Holdings and Taitron Components

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

The idea behind DoubleVerify Holdings and Taitron Components Incorporated 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.