Correlation Between Doubledown Interactive and Skillz Platform

Can any of the company-specific risk be diversified away by investing in both Doubledown Interactive and Skillz Platform 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 Skillz Platform 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 Skillz Platform, you can compare the effects of market volatilities on Doubledown Interactive and Skillz Platform 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 Skillz Platform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubledown Interactive and Skillz Platform.

Diversification Opportunities for Doubledown Interactive and Skillz Platform

0.19

Correlation Coefficient

Doubledown Interactive  Skillz Platform

Average diversification

The 3 months correlation between Doubledown and Skillz is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Doubledown Interactive Co and Skillz Platform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skillz Platform 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 Skillz Platform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skillz Platform has no effect on the direction of Doubledown Interactive i.e., Doubledown Interactive and Skillz Platform go up and down completely randomly.

Pair Corralation between Doubledown Interactive and Skillz Platform

Considering the 90-day investment horizon Doubledown Interactive Co is expected to generate 0.77 times more return on investment than Skillz Platform. However, Doubledown Interactive Co is 1.29 times less risky than Skillz Platform. It trades about 0.03 of its potential returns per unit of risk. Skillz Platform is currently generating about -0.01 per unit of risk. If you would invest  845.00  in Doubledown Interactive Co on September 20, 2024 and sell it today you would earn a total of  184.00  from holding Doubledown Interactive Co or generate 21.78% return on investment over 90 days.

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

Doubledown Interactive Co  vs.  Skillz Platform

Doubledown Interactive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubledown Interactive Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Skillz Platform

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skillz Platform has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Doubledown Interactive and Skillz Platform

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

The idea behind Doubledown Interactive Co and Skillz Platform 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.