Correlation Between Digital Locations and ENGlobal
Can any of the company-specific risk be diversified away by investing in both Digital Locations and ENGlobal 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 Digital Locations and ENGlobal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Locations and ENGlobal, you can compare the effects of market volatilities on Digital Locations and ENGlobal 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 Digital Locations with a short position of ENGlobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Locations and ENGlobal.
Diversification Opportunities for Digital Locations and ENGlobal
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Digital and ENGlobal is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Digital Locations and ENGlobal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGlobal and Digital Locations 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 Digital Locations are associated (or correlated) with ENGlobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGlobal has no effect on the direction of Digital Locations i.e., Digital Locations and ENGlobal go up and down completely randomly.
Pair Corralation between Digital Locations and ENGlobal
Given the investment horizon of 90 days Digital Locations is expected to generate 2.34 times more return on investment than ENGlobal. However, Digital Locations is 2.34 times more volatile than ENGlobal. It trades about 0.05 of its potential returns per unit of risk. ENGlobal is currently generating about 0.0 per unit of risk. If you would invest 0.11 in Digital Locations on August 26, 2024 and sell it today you would lose (0.03) from holding Digital Locations or give up 27.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Locations vs. ENGlobal
Performance |
| Timeline |
| Digital Locations |
| ENGlobal |
Digital Locations and ENGlobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Locations and ENGlobal
The main advantage of trading using opposite Digital Locations and ENGlobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Locations position performs unexpectedly, ENGlobal 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 ENGlobal will offset losses from the drop in ENGlobal's long position.| Digital Locations vs. JNS Holdings Corp | Digital Locations vs. Orion Group Holdings | Digital Locations vs. Arcadis NV | Digital Locations vs. VINCI SA |
| ENGlobal vs. Fuel Tech | ENGlobal vs. Polar Power | ENGlobal vs. Ocean Power Technologies | ENGlobal vs. Pioneer Power Solutions |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |