Correlation Between G Medical and Digital Brands
Can any of the company-specific risk be diversified away by investing in both G Medical and Digital Brands 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 G Medical and Digital Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G Medical Innovations and Digital Brands Group, you can compare the effects of market volatilities on G Medical and Digital Brands 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 G Medical with a short position of Digital Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Medical and Digital Brands.
Diversification Opportunities for G Medical and Digital Brands
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GMVD and Digital is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding G Medical Innovations and Digital Brands Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Brands Group and G Medical 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 G Medical Innovations are associated (or correlated) with Digital Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Brands Group has no effect on the direction of G Medical i.e., G Medical and Digital Brands go up and down completely randomly.
Pair Corralation between G Medical and Digital Brands
Given the investment horizon of 90 days G Medical Innovations is expected to generate 1.06 times more return on investment than Digital Brands. However, G Medical is 1.06 times more volatile than Digital Brands Group. It trades about -0.06 of its potential returns per unit of risk. Digital Brands Group is currently generating about -0.07 per unit of risk. If you would invest 337.00 in G Medical Innovations on August 24, 2024 and sell it today you would lose (304.00) from holding G Medical Innovations or give up 90.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.06% |
| Values | Daily Returns |
G Medical Innovations vs. Digital Brands Group
Performance |
| Timeline |
| G Medical Innovations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Digital Brands Group |
G Medical and Digital Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G Medical and Digital Brands
The main advantage of trading using opposite G Medical and Digital Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Medical position performs unexpectedly, Digital Brands 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 Digital Brands will offset losses from the drop in Digital Brands' long position.| G Medical vs. Innovative Eyewear | G Medical vs. Sharps Technology | G Medical vs. JIN MEDICAL INTERNATIONAL | G Medical vs. Nexgel Inc |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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