Correlation Between Digi International and Daily Journal
Can any of the company-specific risk be diversified away by investing in both Digi International and Daily Journal 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 Daily Journal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Daily Journal Corp, you can compare the effects of market volatilities on Digi International and Daily Journal 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 Daily Journal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Daily Journal.
Diversification Opportunities for Digi International and Daily Journal
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digi and Daily is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Daily Journal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daily Journal Corp 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 Daily Journal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daily Journal Corp has no effect on the direction of Digi International i.e., Digi International and Daily Journal go up and down completely randomly.
Pair Corralation between Digi International and Daily Journal
Given the investment horizon of 90 days Digi International is expected to generate 1.21 times less return on investment than Daily Journal. But when comparing it to its historical volatility, Digi International is 1.41 times less risky than Daily Journal. It trades about 0.19 of its potential returns per unit of risk. Daily Journal Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 49,808 in Daily Journal Corp on August 31, 2024 and sell it today you would earn a total of 6,643 from holding Daily Journal Corp or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Daily Journal Corp
Performance |
| Timeline |
| Digi International |
| Daily Journal Corp |
Digi International and Daily Journal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Daily Journal
The main advantage of trading using opposite Digi International and Daily Journal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, Daily Journal 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 Daily Journal will offset losses from the drop in Daily Journal's long position.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| Daily Journal vs. Meridianlink | Daily Journal vs. CoreCard Corp | Daily Journal vs. Enfusion | Daily Journal vs. Issuer Direct 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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