Correlation Between DigitalBridge and New Concept
Can any of the company-specific risk be diversified away by investing in both DigitalBridge and New Concept 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 DigitalBridge and New Concept into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DigitalBridge Group and New Concept Energy, you can compare the effects of market volatilities on DigitalBridge and New Concept 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 DigitalBridge with a short position of New Concept. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigitalBridge and New Concept.
Diversification Opportunities for DigitalBridge and New Concept
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between DigitalBridge and New is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding DigitalBridge Group and New Concept Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Concept Energy and DigitalBridge 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 DigitalBridge Group are associated (or correlated) with New Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Concept Energy has no effect on the direction of DigitalBridge i.e., DigitalBridge and New Concept go up and down completely randomly.
Pair Corralation between DigitalBridge and New Concept
Assuming the 90 days trading horizon DigitalBridge is expected to generate 2.95 times less return on investment than New Concept. But when comparing it to its historical volatility, DigitalBridge Group is 4.58 times less risky than New Concept. It trades about 0.14 of its potential returns per unit of risk. New Concept Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 115.00 in New Concept Energy on October 15, 2024 and sell it today you would earn a total of 4.00 from holding New Concept Energy or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DigitalBridge Group vs. New Concept Energy
Performance |
| Timeline |
| DigitalBridge Group |
| New Concept Energy |
DigitalBridge and New Concept Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DigitalBridge and New Concept
The main advantage of trading using opposite DigitalBridge and New Concept positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigitalBridge position performs unexpectedly, New Concept 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 New Concept will offset losses from the drop in New Concept's long position.| DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. ACRES Commercial Realty | DigitalBridge vs. Chimera Investment |
| New Concept vs. Marcus Millichap | New Concept vs. J W Mays | New Concept vs. Frp Holdings Ord | New Concept vs. Maui Land Pineapple |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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