Correlation Between Digi International and FG Merger
Can any of the company-specific risk be diversified away by investing in both Digi International and FG Merger 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 FG Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and FG Merger Corp, you can compare the effects of market volatilities on Digi International and FG Merger 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 FG Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and FG Merger.
Diversification Opportunities for Digi International and FG Merger
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digi and FGMCW is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and FG Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Merger 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 FG Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Merger Corp has no effect on the direction of Digi International i.e., Digi International and FG Merger go up and down completely randomly.
Pair Corralation between Digi International and FG Merger
Given the investment horizon of 90 days Digi International is expected to generate 554.09 times less return on investment than FG Merger. But when comparing it to its historical volatility, Digi International is 17.08 times less risky than FG Merger. It trades about 0.01 of its potential returns per unit of risk. FG Merger Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5.00 in FG Merger Corp on September 12, 2024 and sell it today you would earn a total of 5.00 from holding FG Merger Corp or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 15.56% |
| Values | Daily Returns |
Digi International vs. FG Merger Corp
Performance |
| Timeline |
| Digi International |
| FG Merger Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Digi International and FG Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and FG Merger
The main advantage of trading using opposite Digi International and FG Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, FG Merger 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 FG Merger will offset losses from the drop in FG Merger's long position.| Digi International vs. Victory Integrity Smallmid Cap | Digi International vs. Hilton Worldwide Holdings | Digi International vs. NVIDIA | Digi International vs. JPMorgan Chase Co |
| FG Merger vs. Western Digital | FG Merger vs. Meiwu Technology Co | FG Merger vs. Arrow Electronics | FG Merger vs. CTS Corporation |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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