Correlation Between DGTX and ABL
Can any of the company-specific risk be diversified away by investing in both DGTX and ABL 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 DGTX and ABL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DGTX and ABL, you can compare the effects of market volatilities on DGTX and ABL 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 DGTX with a short position of ABL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DGTX and ABL.
Diversification Opportunities for DGTX and ABL
Very weak diversification
The 3 months correlation between DGTX and ABL is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding DGTX and ABL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABL and DGTX 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 DGTX are associated (or correlated) with ABL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABL has no effect on the direction of DGTX i.e., DGTX and ABL go up and down completely randomly.
Pair Corralation between DGTX and ABL
Assuming the 90 days trading horizon DGTX is expected to generate 37.38 times more return on investment than ABL. However, DGTX is 37.38 times more volatile than ABL. It trades about 0.15 of its potential returns per unit of risk. ABL is currently generating about 0.13 per unit of risk. If you would invest 0.00 in DGTX on August 25, 2024 and sell it today you would earn a total of 0.00 from holding DGTX or generate 330.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 55.33% |
| Values | Daily Returns |
DGTX vs. ABL
Performance |
| Timeline |
| DGTX |
| ABL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DGTX and ABL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DGTX and ABL
The main advantage of trading using opposite DGTX and ABL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DGTX position performs unexpectedly, ABL 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 ABL will offset losses from the drop in ABL's long position.The idea behind DGTX and ABL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |