Correlation Between DGTL Holdings and 3M
Can any of the company-specific risk be diversified away by investing in both DGTL Holdings and 3M 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 DGTL Holdings and 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DGTL Holdings and 3M Company, you can compare the effects of market volatilities on DGTL Holdings and 3M 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 DGTL Holdings with a short position of 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of DGTL Holdings and 3M.
Diversification Opportunities for DGTL Holdings and 3M
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DGTL and 3M is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DGTL Holdings and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company and DGTL Holdings 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 DGTL Holdings are associated (or correlated) with 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of DGTL Holdings i.e., DGTL Holdings and 3M go up and down completely randomly.
Pair Corralation between DGTL Holdings and 3M
Assuming the 90 days horizon DGTL Holdings is expected to generate 36.64 times more return on investment than 3M. However, DGTL Holdings is 36.64 times more volatile than 3M Company. It trades about 0.09 of its potential returns per unit of risk. 3M Company is currently generating about 0.05 per unit of risk. If you would invest 42.00 in DGTL Holdings on September 13, 2024 and sell it today you would lose (41.40) from holding DGTL Holdings or give up 98.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
DGTL Holdings vs. 3M Company
Performance |
| Timeline |
| DGTL Holdings |
| 3M Company |
DGTL Holdings and 3M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DGTL Holdings and 3M
The main advantage of trading using opposite DGTL Holdings and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DGTL Holdings position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.| DGTL Holdings vs. Tinybeans Group Limited | DGTL Holdings vs. Sabio Holdings | DGTL Holdings vs. Zoomd Technologies | DGTL Holdings vs. Quizam Media |
| 3M vs. Vast Renewables Limited | 3M vs. 1847 Holdings LLC | 3M vs. Westport Fuel Systems | 3M vs. Falcons Beyond Global, |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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