Correlation Between Digi International and ConnectM Technology
Can any of the company-specific risk be diversified away by investing in both Digi International and ConnectM Technology 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 ConnectM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and ConnectM Technology Solutions,, you can compare the effects of market volatilities on Digi International and ConnectM Technology 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 ConnectM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and ConnectM Technology.
Diversification Opportunities for Digi International and ConnectM Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digi and ConnectM is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and ConnectM Technology Solutions, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectM Technology 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 ConnectM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectM Technology has no effect on the direction of Digi International i.e., Digi International and ConnectM Technology go up and down completely randomly.
Pair Corralation between Digi International and ConnectM Technology
Given the investment horizon of 90 days Digi International is expected to generate 0.47 times more return on investment than ConnectM Technology. However, Digi International is 2.14 times less risky than ConnectM Technology. It trades about 0.0 of its potential returns per unit of risk. ConnectM Technology Solutions, is currently generating about -0.08 per unit of risk. If you would invest 3,775 in Digi International on September 2, 2024 and sell it today you would lose (453.00) from holding Digi International or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. ConnectM Technology Solutions,
Performance |
| Timeline |
| Digi International |
| ConnectM Technology |
Digi International and ConnectM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and ConnectM Technology
The main advantage of trading using opposite Digi International and ConnectM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, ConnectM Technology 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 ConnectM Technology will offset losses from the drop in ConnectM Technology's long position.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| ConnectM Technology vs. BorgWarner | ConnectM Technology vs. Sun Life Financial | ConnectM Technology vs. CT Real Estate | ConnectM Technology vs. SEI Investments |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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