Correlation Between HE Equipment and DigiAsia Corp
Can any of the company-specific risk be diversified away by investing in both HE Equipment and DigiAsia Corp 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 HE Equipment and DigiAsia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and DigiAsia Corp, you can compare the effects of market volatilities on HE Equipment and DigiAsia Corp 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 HE Equipment with a short position of DigiAsia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and DigiAsia Corp.
Diversification Opportunities for HE Equipment and DigiAsia Corp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HEES and DigiAsia is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and DigiAsia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiAsia Corp and HE Equipment 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 HE Equipment Services are associated (or correlated) with DigiAsia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiAsia Corp has no effect on the direction of HE Equipment i.e., HE Equipment and DigiAsia Corp go up and down completely randomly.
Pair Corralation between HE Equipment and DigiAsia Corp
Given the investment horizon of 90 days HE Equipment Services is expected to under-perform the DigiAsia Corp. But the stock apears to be less risky and, when comparing its historical volatility, HE Equipment Services is 9.08 times less risky than DigiAsia Corp. The stock trades about -0.5 of its potential returns per unit of risk. The DigiAsia Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 59.00 in DigiAsia Corp on October 7, 2024 and sell it today you would earn a total of 50.00 from holding DigiAsia Corp or generate 84.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. DigiAsia Corp
Performance |
| Timeline |
| HE Equipment Services |
| DigiAsia Corp |
HE Equipment and DigiAsia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and DigiAsia Corp
The main advantage of trading using opposite HE Equipment and DigiAsia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, DigiAsia Corp 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 DigiAsia Corp will offset losses from the drop in DigiAsia Corp's long position.| HE Equipment vs. GATX Corporation | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Alta Equipment Group | HE Equipment vs. Ryder System |
| DigiAsia Corp vs. Boston Beer | DigiAsia Corp vs. Sun Country Airlines | DigiAsia Corp vs. Nexstar Broadcasting Group | DigiAsia Corp vs. 51Talk Online Education |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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