Correlation Between Integral and Cardlytics

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

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

Diversification Opportunities for Integral and Cardlytics

-0.69

Correlation Coefficient

Integral  Cardlytics

Excellent diversification

The 3 months correlation between Integral and Cardlytics is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics and Integral 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 Integral Ad Science are associated (or correlated) with Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of Integral i.e., Integral and Cardlytics go up and down completely randomly.

Pair Corralation between Integral and Cardlytics

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the Cardlytics. But the stock apears to be less risky and, when comparing its historical volatility, Integral Ad Science is 5.97 times less risky than Cardlytics. The stock trades about -0.02 of its potential returns per unit of risk. The Cardlytics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  795.00  in Cardlytics on January 29, 2024 and sell it today you would earn a total of  436.00  from holding Cardlytics or generate 54.84% return on investment over 90 days.

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

Integral Ad Science  vs.  Cardlytics

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cardlytics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cardlytics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Cardlytics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integral and Cardlytics

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

The idea behind Integral Ad Science and Cardlytics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.