Correlation Between DeFi Technologies and DigiMax Global
Can any of the company-specific risk be diversified away by investing in both DeFi Technologies and DigiMax Global 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 DeFi Technologies and DigiMax Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DeFi Technologies and DigiMax Global, you can compare the effects of market volatilities on DeFi Technologies and DigiMax Global 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 DeFi Technologies with a short position of DigiMax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of DeFi Technologies and DigiMax Global.
Diversification Opportunities for DeFi Technologies and DigiMax Global
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between DeFi and DigiMax is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding DeFi Technologies and DigiMax Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiMax Global and DeFi Technologies 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 DeFi Technologies are associated (or correlated) with DigiMax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiMax Global has no effect on the direction of DeFi Technologies i.e., DeFi Technologies and DigiMax Global go up and down completely randomly.
Pair Corralation between DeFi Technologies and DigiMax Global
Assuming the 90 days horizon DeFi Technologies is expected to generate 10.84 times less return on investment than DigiMax Global. But when comparing it to its historical volatility, DeFi Technologies is 10.02 times less risky than DigiMax Global. It trades about 0.11 of its potential returns per unit of risk. DigiMax Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.50 in DigiMax Global on August 30, 2024 and sell it today you would lose (0.49) from holding DigiMax Global or give up 32.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DeFi Technologies vs. DigiMax Global
Performance |
| Timeline |
| DeFi Technologies |
| DigiMax Global |
DeFi Technologies and DigiMax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DeFi Technologies and DigiMax Global
The main advantage of trading using opposite DeFi Technologies and DigiMax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeFi Technologies position performs unexpectedly, DigiMax Global 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 DigiMax Global will offset losses from the drop in DigiMax Global's long position.| DeFi Technologies vs. Argo Blockchain PLC | DeFi Technologies vs. DigiMax Global | DeFi Technologies vs. Galaxy Digital Holdings | DeFi Technologies vs. BIG Blockchain Intelligence |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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