Correlation Between BigBearai Holdings and Digital China
Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and Digital China 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 BigBearai Holdings and Digital China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BigBearai Holdings and Digital China Holdings, you can compare the effects of market volatilities on BigBearai Holdings and Digital China 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 BigBearai Holdings with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and Digital China.
Diversification Opportunities for BigBearai Holdings and Digital China
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BigBearai and Digital is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Digital China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Holdings and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Holdings has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Digital China go up and down completely randomly.
Pair Corralation between BigBearai Holdings and Digital China
Given the investment horizon of 90 days BigBearai Holdings is expected to generate 3.26 times more return on investment than Digital China. However, BigBearai Holdings is 3.26 times more volatile than Digital China Holdings. It trades about 0.05 of its potential returns per unit of risk. Digital China Holdings is currently generating about 0.01 per unit of risk. If you would invest 95.00 in BigBearai Holdings on August 27, 2024 and sell it today you would earn a total of 150.00 from holding BigBearai Holdings or generate 157.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
BigBearai Holdings vs. Digital China Holdings
Performance |
| Timeline |
| BigBearai Holdings |
| Digital China Holdings |
BigBearai Holdings and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BigBearai Holdings and Digital China
The main advantage of trading using opposite BigBearai Holdings and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| BigBearai Holdings vs. Innodata | BigBearai Holdings vs. CLPS Inc | BigBearai Holdings vs. ARB IOT Group | BigBearai Holdings vs. FiscalNote Holdings |
| Digital China vs. Kyndryl Holdings | Digital China vs. Accenture plc | Digital China vs. BigBearai Holdings | Digital China vs. Xerox Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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