Correlation Between AdTheorent Holding and Ziff Davis

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

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

Diversification Opportunities for AdTheorent Holding and Ziff Davis

-0.89

Correlation Coefficient

AdTheorent Holding  Ziff Davis

Pay attention - limited upside

The 3 months correlation between AdTheorent and Ziff is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding AdTheorent Holding and Ziff Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziff Davis and AdTheorent Holding 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 AdTheorent Holding are associated (or correlated) with Ziff Davis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziff Davis has no effect on the direction of AdTheorent Holding i.e., AdTheorent Holding and Ziff Davis go up and down completely randomly.

Pair Corralation between AdTheorent Holding and Ziff Davis

Assuming the 90 days horizon AdTheorent Holding is expected to generate 1.63 times less return on investment than Ziff Davis. But when comparing it to its historical volatility, AdTheorent Holding is 1.02 times less risky than Ziff Davis. It trades about 0.11 of its potential returns per unit of risk. Ziff Davis is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5,077  in Ziff Davis on February 22, 2024 and sell it today you would earn a total of  499.00  from holding Ziff Davis or generate 9.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	86.36%
Values	Daily Returns

AdTheorent Holding  vs.  Ziff Davis

AdTheorent Holding

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AdTheorent Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical indicators, AdTheorent Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Ziff Davis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ziff Davis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with AdTheorent Holding and Ziff Davis

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

The idea behind AdTheorent Holding and Ziff Davis 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.