Correlation Between Digital Power and Atec
Can any of the company-specific risk be diversified away by investing in both Digital Power and Atec 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 Digital Power and Atec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and Atec Co, you can compare the effects of market volatilities on Digital Power and Atec 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 Digital Power with a short position of Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Atec.
Diversification Opportunities for Digital Power and Atec
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digital and Atec is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Atec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec and Digital Power 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 Digital Power Communications are associated (or correlated) with Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec has no effect on the direction of Digital Power i.e., Digital Power and Atec go up and down completely randomly.
Pair Corralation between Digital Power and Atec
Assuming the 90 days trading horizon Digital Power is expected to generate 6.11 times less return on investment than Atec. But when comparing it to its historical volatility, Digital Power Communications is 7.61 times less risky than Atec. It trades about 0.4 of its potential returns per unit of risk. Atec Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,655,000 in Atec Co on September 15, 2024 and sell it today you would earn a total of 2,060,000 from holding Atec Co or generate 124.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. Atec Co
Performance |
| Timeline |
| Digital Power Commun |
| Atec |
Digital Power and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Atec
The main advantage of trading using opposite Digital Power and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| Digital Power vs. Samsung Electronics Co | Digital Power vs. Samsung Electronics Co | Digital Power vs. SK Hynix | Digital Power vs. POSCO Holdings |
| Atec vs. Cube Entertainment | Atec vs. Dreamus Company | Atec vs. LG Energy Solution | Atec vs. Dongwon System |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |