Correlation Between Digi International and Harmonic
Can any of the company-specific risk be diversified away by investing in both Digi International and Harmonic 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 Harmonic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Harmonic, you can compare the effects of market volatilities on Digi International and Harmonic 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 Harmonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Harmonic.
Diversification Opportunities for Digi International and Harmonic
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digi and Harmonic is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Harmonic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmonic 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 Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmonic has no effect on the direction of Digi International i.e., Digi International and Harmonic go up and down completely randomly.
Pair Corralation between Digi International and Harmonic
Given the investment horizon of 90 days Digi International is expected to under-perform the Harmonic. But the stock apears to be less risky and, when comparing its historical volatility, Digi International is 1.23 times less risky than Harmonic. The stock trades about 0.0 of its potential returns per unit of risk. The Harmonic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,362 in Harmonic on August 27, 2024 and sell it today you would lose (115.00) from holding Harmonic or give up 8.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Harmonic
Performance |
| Timeline |
| Digi International |
| Harmonic |
Digi International and Harmonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Harmonic
The main advantage of trading using opposite Digi International and Harmonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, Harmonic 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 Harmonic will offset losses from the drop in Harmonic's long position.| Digi International vs. Ichor Holdings | Digi International vs. Fabrinet | Digi International vs. Hello Group | Digi International vs. Ultra Clean Holdings |
| Harmonic vs. NETGEAR | Harmonic vs. Juniper Networks | Harmonic vs. Digi International | Harmonic vs. Clearfield |
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 CEOs Directory module to screen CEOs from public companies around the world.
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