Correlation Between Doubledown Interactive and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Doubledown Interactive and Kontoor Brands 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 Doubledown Interactive and Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doubledown Interactive Co and Kontoor Brands, you can compare the effects of market volatilities on Doubledown Interactive and Kontoor Brands 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 Doubledown Interactive with a short position of Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubledown Interactive and Kontoor Brands.
Diversification Opportunities for Doubledown Interactive and Kontoor Brands
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Doubledown and Kontoor is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Doubledown Interactive Co and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands and Doubledown Interactive 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 Doubledown Interactive Co are associated (or correlated) with Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Doubledown Interactive i.e., Doubledown Interactive and Kontoor Brands go up and down completely randomly.
Pair Corralation between Doubledown Interactive and Kontoor Brands
Considering the 90-day investment horizon Doubledown Interactive Co is expected to generate 0.66 times more return on investment than Kontoor Brands. However, Doubledown Interactive Co is 1.52 times less risky than Kontoor Brands. It trades about 0.07 of its potential returns per unit of risk. Kontoor Brands is currently generating about -0.23 per unit of risk. If you would invest 975.00 in Doubledown Interactive Co on November 28, 2024 and sell it today you would earn a total of 32.00 from holding Doubledown Interactive Co or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubledown Interactive Co vs. Kontoor Brands
Performance |
| Timeline |
| Doubledown Interactive |
| Kontoor Brands |
Doubledown Interactive and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubledown Interactive and Kontoor Brands
The main advantage of trading using opposite Doubledown Interactive and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubledown Interactive position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.| Doubledown Interactive vs. Playtika Holding Corp | Doubledown Interactive vs. SohuCom | Doubledown Interactive vs. Playstudios | Doubledown Interactive vs. GDEV Inc |
| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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