Correlation Between Pubmatic and Digital Turbine
Can any of the company-specific risk be diversified away by investing in both Pubmatic and Digital Turbine 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 Pubmatic and Digital Turbine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pubmatic and Digital Turbine, you can compare the effects of market volatilities on Pubmatic and Digital Turbine 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 Pubmatic with a short position of Digital Turbine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pubmatic and Digital Turbine.
Diversification Opportunities for Pubmatic and Digital Turbine
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pubmatic and Digital is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pubmatic and Digital Turbine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Turbine and Pubmatic 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 Pubmatic are associated (or correlated) with Digital Turbine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Turbine has no effect on the direction of Pubmatic i.e., Pubmatic and Digital Turbine go up and down completely randomly.
Pair Corralation between Pubmatic and Digital Turbine
Given the investment horizon of 90 days Pubmatic is expected to generate 0.28 times more return on investment than Digital Turbine. However, Pubmatic is 3.57 times less risky than Digital Turbine. It trades about 0.07 of its potential returns per unit of risk. Digital Turbine is currently generating about -0.28 per unit of risk. If you would invest 1,521 in Pubmatic on August 31, 2024 and sell it today you would earn a total of 62.00 from holding Pubmatic or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pubmatic vs. Digital Turbine
Performance |
| Timeline |
| Pubmatic |
| Digital Turbine |
Pubmatic and Digital Turbine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pubmatic and Digital Turbine
The main advantage of trading using opposite Pubmatic and Digital Turbine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pubmatic position performs unexpectedly, Digital Turbine 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 Digital Turbine will offset losses from the drop in Digital Turbine's long position.The idea behind Pubmatic and Digital Turbine 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.| Digital Turbine vs. Autodesk | Digital Turbine vs. Intuit Inc | Digital Turbine vs. Zoom Video Communications | Digital Turbine vs. Snowflake |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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