Correlation Between Direct Digital and Innovid Corp
Can any of the company-specific risk be diversified away by investing in both Direct Digital and Innovid Corp 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 Direct Digital and Innovid Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direct Digital Holdings and Innovid Corp, you can compare the effects of market volatilities on Direct Digital and Innovid Corp 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 Direct Digital with a short position of Innovid Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Digital and Innovid Corp.
Diversification Opportunities for Direct Digital and Innovid Corp
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Direct and Innovid is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Direct Digital Holdings and Innovid Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovid Corp and Direct Digital 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 Direct Digital Holdings are associated (or correlated) with Innovid Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovid Corp has no effect on the direction of Direct Digital i.e., Direct Digital and Innovid Corp go up and down completely randomly.
Pair Corralation between Direct Digital and Innovid Corp
Given the investment horizon of 90 days Direct Digital Holdings is expected to under-perform the Innovid Corp. But the stock apears to be less risky and, when comparing its historical volatility, Direct Digital Holdings is 1.36 times less risky than Innovid Corp. The stock trades about -0.07 of its potential returns per unit of risk. The Innovid Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Innovid Corp on August 29, 2024 and sell it today you would earn a total of 124.00 from holding Innovid Corp or generate 68.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direct Digital Holdings vs. Innovid Corp
Performance |
| Timeline |
| Direct Digital Holdings |
| Innovid Corp |
Direct Digital and Innovid Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direct Digital and Innovid Corp
The main advantage of trading using opposite Direct Digital and Innovid Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Digital position performs unexpectedly, Innovid Corp 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 Innovid Corp will offset losses from the drop in Innovid Corp's long position.| Direct Digital vs. Emerald Expositions Events | Direct Digital vs. Mirriad Advertising plc | Direct Digital vs. INEO Tech Corp | Direct Digital vs. Marchex |
| Innovid Corp vs. ADTRAN Inc | Innovid Corp vs. Belden Inc | Innovid Corp vs. ADC Therapeutics SA | Innovid Corp vs. Comtech Telecommunications Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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