Correlation Between Digitalist Group and Detection Technology
Can any of the company-specific risk be diversified away by investing in both Digitalist Group and Detection Technology 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 Digitalist Group and Detection Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digitalist Group Oyj and Detection Technology OY, you can compare the effects of market volatilities on Digitalist Group and Detection Technology 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 Digitalist Group with a short position of Detection Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digitalist Group and Detection Technology.
Diversification Opportunities for Digitalist Group and Detection Technology
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Digitalist and Detection is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Digitalist Group Oyj and Detection Technology OY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Detection Technology and Digitalist Group 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 Digitalist Group Oyj are associated (or correlated) with Detection Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Detection Technology has no effect on the direction of Digitalist Group i.e., Digitalist Group and Detection Technology go up and down completely randomly.
Pair Corralation between Digitalist Group and Detection Technology
Assuming the 90 days trading horizon Digitalist Group Oyj is expected to generate 1.74 times more return on investment than Detection Technology. However, Digitalist Group is 1.74 times more volatile than Detection Technology OY. It trades about 0.01 of its potential returns per unit of risk. Detection Technology OY is currently generating about -0.01 per unit of risk. If you would invest 2.08 in Digitalist Group Oyj on August 24, 2024 and sell it today you would lose (0.22) from holding Digitalist Group Oyj or give up 10.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digitalist Group Oyj vs. Detection Technology OY
Performance |
| Timeline |
| Digitalist Group Oyj |
| Detection Technology |
Digitalist Group and Detection Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digitalist Group and Detection Technology
The main advantage of trading using opposite Digitalist Group and Detection Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digitalist Group position performs unexpectedly, Detection Technology 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 Detection Technology will offset losses from the drop in Detection Technology's long position.| Digitalist Group vs. Tulikivi Oyj A | Digitalist Group vs. Afarak Group Oyj | Digitalist Group vs. Tecnotree Oyj | Digitalist Group vs. Solteq PLC |
| Detection Technology vs. Tecnotree Oyj | Detection Technology vs. Qt Group Oyj | Detection Technology vs. Bittium Oyj | Detection Technology vs. Harvia Oyj |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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