Correlation Between DGB and GRIN

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

Diversification Opportunities for DGB and GRIN

DGBGRINDiversified AwayDGBGRINDiversified Away100%
0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between DGB and GRIN is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding DGB and GRIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIN and DGB 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 DGB are associated (or correlated) with GRIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIN has no effect on the direction of DGB i.e., DGB and GRIN go up and down completely randomly.

Pair Corralation between DGB and GRIN

Assuming the 90 days trading horizon DGB is expected to under-perform the GRIN. But the crypto coin apears to be less risky and, when comparing its historical volatility, DGB is 1.26 times less risky than GRIN. The crypto coin trades about -0.18 of its potential returns per unit of risk. The GRIN is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2.39  in GRIN on November 23, 2024 and sell it today you would lose (0.17) from holding GRIN or give up 7.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

DGB  vs.  GRIN

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50050100
JavaScript chart by amCharts 3.21.15DGB GRIN
       Timeline  
DGB 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days DGB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, DGB is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0080.010.0120.0140.0160.0180.020.022
GRIN 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days GRIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for GRIN shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.020.0250.030.0350.040.045

DGB and GRIN Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-30.55-22.88-15.21-7.540.07.5715.2722.9730.66 0.00400.00450.00500.00550.00600.00650.00700.0075
JavaScript chart by amCharts 3.21.15DGB GRIN
       Returns  

Pair Trading with DGB and GRIN

The main advantage of trading using opposite DGB and GRIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DGB position performs unexpectedly, GRIN 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 GRIN will offset losses from the drop in GRIN's long position.
The idea behind DGB and GRIN 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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