Correlation Between DoubleVerify Holdings and HubSpot

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

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

Diversification Opportunities for DoubleVerify Holdings and HubSpot

-0.33

Correlation Coefficient

DoubleVerify Holdings  HubSpot

Very good diversification

The 3 months correlation between DoubleVerify and HubSpot is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding DoubleVerify Holdings and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot and DoubleVerify Holdings 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 DoubleVerify Holdings are associated (or correlated) with HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of DoubleVerify Holdings i.e., DoubleVerify Holdings and HubSpot go up and down completely randomly.

Pair Corralation between DoubleVerify Holdings and HubSpot

Allowing for the 90-day total investment horizon DoubleVerify Holdings is expected to under-perform the HubSpot. In addition to that, DoubleVerify Holdings is 3.71 times more volatile than HubSpot. It trades about -0.24 of its total potential returns per unit of risk. HubSpot is currently generating about -0.16 per unit of volatility. If you would invest  67,015  in HubSpot on February 8, 2024 and sell it today you would lose (5,469) from holding HubSpot or give up 8.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DoubleVerify Holdings  vs.  HubSpot

DoubleVerify Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DoubleVerify Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

HubSpot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HubSpot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, HubSpot is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with DoubleVerify Holdings and HubSpot

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

The idea behind DoubleVerify Holdings and HubSpot 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.