Correlation Between Digital Brands and Troika Media
Can any of the company-specific risk be diversified away by investing in both Digital Brands and Troika Media 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 Brands and Troika Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Brands Group and Troika Media Group, you can compare the effects of market volatilities on Digital Brands and Troika Media 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 Brands with a short position of Troika Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Brands and Troika Media.
Diversification Opportunities for Digital Brands and Troika Media
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Digital and Troika is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Digital Brands Group and Troika Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Troika Media Group and Digital Brands 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 Brands Group are associated (or correlated) with Troika Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Troika Media Group has no effect on the direction of Digital Brands i.e., Digital Brands and Troika Media go up and down completely randomly.
Pair Corralation between Digital Brands and Troika Media
If you would invest 1,378 in Digital Brands Group on October 25, 2024 and sell it today you would earn a total of 222.00 from holding Digital Brands Group or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.1% |
| Values | Daily Returns |
Digital Brands Group vs. Troika Media Group
Performance |
| Timeline |
| Digital Brands Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Troika Media Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Digital Brands and Troika Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Brands and Troika Media
The main advantage of trading using opposite Digital Brands and Troika Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Brands position performs unexpectedly, Troika Media 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 Troika Media will offset losses from the drop in Troika Media's long position.The idea behind Digital Brands Group and Troika Media Group 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.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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