Correlation Between Blue Hat and Doubledown InteractiveCo

Can any of the company-specific risk be diversified away by investing in both Blue Hat and Doubledown InteractiveCo 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 Blue Hat and Doubledown InteractiveCo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blue Hat Interactive and Doubledown InteractiveCo, you can compare the effects of market volatilities on Blue Hat and Doubledown InteractiveCo 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 Blue Hat with a short position of Doubledown InteractiveCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Hat and Doubledown InteractiveCo.

Diversification Opportunities for Blue Hat and Doubledown InteractiveCo

0.39

Correlation Coefficient

Blue Hat  Doubledown InteractiveCo

Weak diversification

The 3 months correlation between Blue and Doubledown is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Blue Hat Interactive and Doubledown InteractiveCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubledown InteractiveCo and Blue Hat 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 Blue Hat Interactive are associated (or correlated) with Doubledown InteractiveCo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubledown InteractiveCo has no effect on the direction of Blue Hat i.e., Blue Hat and Doubledown InteractiveCo go up and down completely randomly.

Pair Corralation between Blue Hat and Doubledown InteractiveCo

Given the investment horizon of 90 days Blue Hat Interactive is expected to generate 3.71 times more return on investment than Doubledown InteractiveCo. However, Blue Hat is 3.71 times more volatile than Doubledown InteractiveCo. It trades about 0.03 of its potential returns per unit of risk. Doubledown InteractiveCo is currently generating about 0.02 per unit of risk. If you would invest  286.00  in Blue Hat Interactive on January 25, 2024 and sell it today you would lose (177.00) from holding Blue Hat Interactive or give up 61.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Blue Hat Interactive  vs.  Doubledown InteractiveCo

Blue Hat Interactive

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Hat Interactive are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Blue Hat may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Doubledown InteractiveCo

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Doubledown InteractiveCo are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Doubledown InteractiveCo demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Hat and Doubledown InteractiveCo

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

The idea behind Blue Hat Interactive and Doubledown InteractiveCo 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 the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.