Correlation Between Digi International and Comtech Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Digi International and Comtech Telecommunicatio 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 Digi International and Comtech Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Digi International and Comtech Telecommunicatio 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 Digi International with a short position of Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Comtech Telecommunicatio.
Diversification Opportunities for Digi International and Comtech Telecommunicatio
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digi and Comtech is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio and Digi International 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 Digi International are associated (or correlated) with Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Digi International i.e., Digi International and Comtech Telecommunicatio go up and down completely randomly.
Pair Corralation between Digi International and Comtech Telecommunicatio
Given the investment horizon of 90 days Digi International is expected to generate 0.19 times more return on investment than Comtech Telecommunicatio. However, Digi International is 5.35 times less risky than Comtech Telecommunicatio. It trades about 0.12 of its potential returns per unit of risk. Comtech Telecommunications Corp is currently generating about -0.22 per unit of risk. If you would invest 2,931 in Digi International on November 2, 2024 and sell it today you would earn a total of 141.00 from holding Digi International or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Comtech Telecommunications Cor
Performance |
| Timeline |
| Digi International |
| Comtech Telecommunicatio |
Digi International and Comtech Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Comtech Telecommunicatio
The main advantage of trading using opposite Digi International and Comtech Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, Comtech Telecommunicatio 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 Comtech Telecommunicatio will offset losses from the drop in Comtech Telecommunicatio's long position.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| Comtech Telecommunicatio vs. KVH Industries | Comtech Telecommunicatio vs. Aviat Networks | Comtech Telecommunicatio vs. Harmonic | Comtech Telecommunicatio vs. Telesat Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |