Correlation Between Daily Journal and Digi International
Can any of the company-specific risk be diversified away by investing in both Daily Journal and Digi International 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 Daily Journal and Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daily Journal Corp and Digi International, you can compare the effects of market volatilities on Daily Journal and Digi International 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 Daily Journal with a short position of Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and Digi International.
Diversification Opportunities for Daily Journal and Digi International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daily and Digi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International and Daily Journal 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 Daily Journal Corp are associated (or correlated) with Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Daily Journal i.e., Daily Journal and Digi International go up and down completely randomly.
Pair Corralation between Daily Journal and Digi International
Given the investment horizon of 90 days Daily Journal Corp is expected to generate 0.84 times more return on investment than Digi International. However, Daily Journal Corp is 1.19 times less risky than Digi International. It trades about 0.08 of its potential returns per unit of risk. Digi International is currently generating about 0.0 per unit of risk. If you would invest 26,513 in Daily Journal Corp on September 3, 2024 and sell it today you would earn a total of 29,938 from holding Daily Journal Corp or generate 112.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Daily Journal Corp vs. Digi International
Performance |
| Timeline |
| Daily Journal Corp |
| Digi International |
Daily Journal and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daily Journal and Digi International
The main advantage of trading using opposite Daily Journal and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daily Journal position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International's long position.| Daily Journal vs. Meridianlink | Daily Journal vs. CoreCard Corp | Daily Journal vs. Enfusion | Daily Journal vs. Issuer Direct Corp |
| Digi International vs. Highway Holdings Limited | Digi International vs. QCR Holdings | Digi International vs. Partner Communications | Digi International vs. Acumen Pharmaceuticals |
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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