Correlation Between Digi International and Safe Pro
Can any of the company-specific risk be diversified away by investing in both Digi International and Safe Pro 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 Safe Pro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Safe Pro Group, you can compare the effects of market volatilities on Digi International and Safe Pro 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 Safe Pro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Safe Pro.
Diversification Opportunities for Digi International and Safe Pro
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digi and Safe is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Safe Pro Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Pro Group 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 Safe Pro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Pro Group has no effect on the direction of Digi International i.e., Digi International and Safe Pro go up and down completely randomly.
Pair Corralation between Digi International and Safe Pro
Given the investment horizon of 90 days Digi International is expected to generate 9.53 times less return on investment than Safe Pro. But when comparing it to its historical volatility, Digi International is 5.16 times less risky than Safe Pro. It trades about 0.12 of its potential returns per unit of risk. Safe Pro Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 237.00 in Safe Pro Group on August 30, 2024 and sell it today you would earn a total of 159.00 from holding Safe Pro Group or generate 67.09% 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. Safe Pro Group
Performance |
| Timeline |
| Digi International |
| Safe Pro Group |
Digi International and Safe Pro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Safe Pro
The main advantage of trading using opposite Digi International and Safe Pro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, Safe Pro 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 Safe Pro will offset losses from the drop in Safe Pro's long position.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| Safe Pro vs. The Boeing | Safe Pro vs. Curtiss Wright | Safe Pro vs. Ehang Holdings | Safe Pro vs. General Dynamics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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