Correlation Between Integral and Digi International
Can any of the company-specific risk be diversified away by investing in both Integral 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 Integral and Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integral Ad Science and Digi International, you can compare the effects of market volatilities on Integral 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 Integral with a short position of Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Digi International.
Diversification Opportunities for Integral and Digi International
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Integral and Digi is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Digi International go up and down completely randomly.
Pair Corralation between Integral and Digi International
Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the Digi International. In addition to that, Integral is 1.31 times more volatile than Digi International. It trades about -0.02 of its total potential returns per unit of risk. Digi International is currently generating about 0.0 per unit of volatility. If you would invest 3,731 in Digi International on August 31, 2024 and sell it today you would lose (409.00) from holding Digi International or give up 10.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integral Ad Science vs. Digi International
Performance |
| Timeline |
| Integral Ad Science |
| Digi International |
Integral and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral and Digi International
The main advantage of trading using opposite Integral and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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.The idea behind Integral Ad Science and Digi International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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