Correlation Between Digital Brand and Gannett

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Can any of the company-specific risk be diversified away by investing in both Digital Brand and Gannett 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 Brand and Gannett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Brand Media and Gannett Co, you can compare the effects of market volatilities on Digital Brand and Gannett 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 Brand with a short position of Gannett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Brand and Gannett.

Diversification Opportunities for Digital Brand and Gannett

DigitalGannettDiversified AwayDigitalGannettDiversified Away100%
-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Digital and Gannett is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Digital Brand Media and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and Digital Brand 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 Brand Media are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Digital Brand i.e., Digital Brand and Gannett go up and down completely randomly.

Pair Corralation between Digital Brand and Gannett

Given the investment horizon of 90 days Digital Brand Media is expected to under-perform the Gannett. In addition to that, Digital Brand is 4.96 times more volatile than Gannett Co. It trades about -0.11 of its total potential returns per unit of risk. Gannett Co is currently generating about -0.19 per unit of volatility. If you would invest  456.00  in Gannett Co on November 27, 2024 and sell it today you would lose (51.00) from holding Gannett Co or give up 11.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Digital Brand Media  vs.  Gannett Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 050100150200250
JavaScript chart by amCharts 3.21.15DBMM GCI
       Timeline  
Digital Brand Media 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Digital Brand Media are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Digital Brand displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.00050.0010.00150.0020.00250.0030.00350.0040.0045
Gannett 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Gannett Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4.24.44.64.855.25.45.6

Digital Brand and Gannett Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-80.57-60.35-40.12-19.890.020.5841.8763.1684.46105.75 0.010.020.030.04
JavaScript chart by amCharts 3.21.15DBMM GCI
       Returns  

Pair Trading with Digital Brand and Gannett

The main advantage of trading using opposite Digital Brand and Gannett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Brand position performs unexpectedly, Gannett 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 Gannett will offset losses from the drop in Gannett's long position.
The idea behind Digital Brand Media and Gannett Co 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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