Correlation Between IHUNT TECHNOLOGY and Digi Communications
Can any of the company-specific risk be diversified away by investing in both IHUNT TECHNOLOGY and Digi Communications 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 IHUNT TECHNOLOGY and Digi Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHUNT TECHNOLOGY IMPORT EXPORT and Digi Communications NV, you can compare the effects of market volatilities on IHUNT TECHNOLOGY and Digi Communications 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 IHUNT TECHNOLOGY with a short position of Digi Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHUNT TECHNOLOGY and Digi Communications.
Diversification Opportunities for IHUNT TECHNOLOGY and Digi Communications
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IHUNT and Digi is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding IHUNT TECHNOLOGY IMPORT EXPORT and Digi Communications NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi Communications and IHUNT TECHNOLOGY 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 IHUNT TECHNOLOGY IMPORT EXPORT are associated (or correlated) with Digi Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi Communications has no effect on the direction of IHUNT TECHNOLOGY i.e., IHUNT TECHNOLOGY and Digi Communications go up and down completely randomly.
Pair Corralation between IHUNT TECHNOLOGY and Digi Communications
Assuming the 90 days trading horizon IHUNT TECHNOLOGY IMPORT EXPORT is expected to generate 3.38 times more return on investment than Digi Communications. However, IHUNT TECHNOLOGY is 3.38 times more volatile than Digi Communications NV. It trades about 0.32 of its potential returns per unit of risk. Digi Communications NV is currently generating about 0.05 per unit of risk. If you would invest 35.00 in IHUNT TECHNOLOGY IMPORT EXPORT on November 4, 2024 and sell it today you would earn a total of 8.00 from holding IHUNT TECHNOLOGY IMPORT EXPORT or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IHUNT TECHNOLOGY IMPORT EXPORT vs. Digi Communications NV
Performance |
| Timeline |
| IHUNT TECHNOLOGY IMPORT |
| Digi Communications |
IHUNT TECHNOLOGY and Digi Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHUNT TECHNOLOGY and Digi Communications
The main advantage of trading using opposite IHUNT TECHNOLOGY and Digi Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHUNT TECHNOLOGY position performs unexpectedly, Digi Communications 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 Communications will offset losses from the drop in Digi Communications' long position.| IHUNT TECHNOLOGY vs. TRANSILVANIA INVESTMENTS ALLIANCE | IHUNT TECHNOLOGY vs. Digi Communications NV | IHUNT TECHNOLOGY vs. Infinity Capital Investments | IHUNT TECHNOLOGY vs. AROBS TRANSILVANIA SOFTWARE |
| Digi Communications vs. Safetech Innovations SA | Digi Communications vs. IHUNT TECHNOLOGY IMPORT EXPORT | Digi Communications vs. Patria Bank SA | Digi Communications vs. IM Vinaria Purcari |
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 Stocks Directory module to find actively traded stocks across global markets.
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