Correlation Between China Index and Doubleverify Holdings

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Can any of the company-specific risk be diversified away by investing in both China Index 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 China Index and Doubleverify Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Index Holdings and Doubleverify Holdings, you can compare the effects of market volatilities on China Index 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 China Index with a short position of Doubleverify Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Index and Doubleverify Holdings.

Diversification Opportunities for China Index and Doubleverify Holdings

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between China and Doubleverify is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding China Index Holdings and Doubleverify Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleverify Holdings and China Index 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 China Index Holdings 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 China Index i.e., China Index and Doubleverify Holdings go up and down completely randomly.

Pair Corralation between China Index and Doubleverify Holdings

Considering the 90-day investment horizon China Index Holdings is expected to under-perform the Doubleverify Holdings. In addition to that, China Index is 1.57 times more volatile than Doubleverify Holdings. It trades about -0.06 of its total potential returns per unit of risk. Doubleverify Holdings is currently generating about -0.04 per unit of volatility. If you would invest  2,517  in Doubleverify Holdings on March 31, 2022 and sell it today you would lose (330.00)  from holding Doubleverify Holdings or give up 13.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.39%
ValuesDaily Returns

China Index Holdings  vs.  Doubleverify Holdings

 Performance (%) 
      Timeline 
China Index Holdings 
China Performance
0 of 100
Over the last 90 days China Index Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Structure and Payout Changes

Dividend Date
2015-03-31

China Price Channel

Doubleverify Holdings 
Doubleverify Performance
0 of 100
Over the last 90 days Doubleverify Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Doubleverify Price Channel

China Index and Doubleverify Holdings Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with China Index and Doubleverify Holdings

The main advantage of trading using opposite China Index and Doubleverify Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Index 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 China Index Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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