Correlation Between Digi Communications and Promateris
Can any of the company-specific risk be diversified away by investing in both Digi Communications and Promateris 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 Communications and Promateris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi Communications NV and Promateris SA, you can compare the effects of market volatilities on Digi Communications and Promateris 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 Communications with a short position of Promateris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi Communications and Promateris.
Diversification Opportunities for Digi Communications and Promateris
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digi and Promateris is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Digi Communications NV and Promateris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promateris SA and Digi Communications 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 Communications NV are associated (or correlated) with Promateris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promateris SA has no effect on the direction of Digi Communications i.e., Digi Communications and Promateris go up and down completely randomly.
Pair Corralation between Digi Communications and Promateris
Assuming the 90 days trading horizon Digi Communications NV is expected to under-perform the Promateris. But the stock apears to be less risky and, when comparing its historical volatility, Digi Communications NV is 3.35 times less risky than Promateris. The stock trades about -0.01 of its potential returns per unit of risk. The Promateris SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 750.00 in Promateris SA on September 3, 2024 and sell it today you would lose (35.00) from holding Promateris SA or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi Communications NV vs. Promateris SA
Performance |
| Timeline |
| Digi Communications |
| Promateris SA |
Digi Communications and Promateris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi Communications and Promateris
The main advantage of trading using opposite Digi Communications and Promateris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi Communications position performs unexpectedly, Promateris 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 Promateris will offset losses from the drop in Promateris' long position.| Digi Communications vs. AROBS TRANSILVANIA SOFTWARE | Digi Communications vs. Infinity Capital Investments | Digi Communications vs. Evergent Investments SA | Digi Communications vs. Safetech Innovations SA |
| Promateris vs. Teraplast Bist | Promateris vs. Electroarges S | Promateris vs. Comvex SA | Promateris vs. Feper SA |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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