Correlation Between Applied Digital and Group Eleven
Can any of the company-specific risk be diversified away by investing in both Applied Digital and Group Eleven 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 Applied Digital and Group Eleven into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Digital and Group Eleven Resources, you can compare the effects of market volatilities on Applied Digital and Group Eleven 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 Applied Digital with a short position of Group Eleven. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Digital and Group Eleven.
Diversification Opportunities for Applied Digital and Group Eleven
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and Group is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Applied Digital and Group Eleven Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Eleven Resources and Applied Digital 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 Applied Digital are associated (or correlated) with Group Eleven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Eleven Resources has no effect on the direction of Applied Digital i.e., Applied Digital and Group Eleven go up and down completely randomly.
Pair Corralation between Applied Digital and Group Eleven
Given the investment horizon of 90 days Applied Digital is expected to under-perform the Group Eleven. In addition to that, Applied Digital is 1.71 times more volatile than Group Eleven Resources. It trades about -0.04 of its total potential returns per unit of risk. Group Eleven Resources is currently generating about 0.1 per unit of volatility. If you would invest 12.00 in Group Eleven Resources on December 11, 2024 and sell it today you would earn a total of 2.00 from holding Group Eleven Resources or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Digital vs. Group Eleven Resources
Performance |
| Timeline |
| Applied Digital |
| Group Eleven Resources |
Applied Digital and Group Eleven Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Digital and Group Eleven
The main advantage of trading using opposite Applied Digital and Group Eleven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Digital position performs unexpectedly, Group Eleven 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 Group Eleven will offset losses from the drop in Group Eleven's long position.| Applied Digital vs. Magic Empire Global | Applied Digital vs. Zhong Yang Financial | Applied Digital vs. Netcapital | Applied Digital vs. Lazard |
| Group Eleven vs. Tinka Resources Limited | Group Eleven vs. Neo Battery Materials | Group Eleven vs. United States Antimony | Group Eleven vs. NioCorp Developments Ltd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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