Correlation Between Patria Bank and Digi Communications
Can any of the company-specific risk be diversified away by investing in both Patria Bank 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 Patria Bank and Digi Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patria Bank SA and Digi Communications NV, you can compare the effects of market volatilities on Patria Bank 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 Patria Bank with a short position of Digi Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Bank and Digi Communications.
Diversification Opportunities for Patria Bank and Digi Communications
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Patria and Digi is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Patria Bank SA and Digi Communications NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi Communications and Patria Bank 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 Patria Bank SA 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 Patria Bank i.e., Patria Bank and Digi Communications go up and down completely randomly.
Pair Corralation between Patria Bank and Digi Communications
Assuming the 90 days trading horizon Patria Bank is expected to generate 1.65 times less return on investment than Digi Communications. But when comparing it to its historical volatility, Patria Bank SA is 1.42 times less risky than Digi Communications. It trades about 0.05 of its potential returns per unit of risk. Digi Communications NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,540 in Digi Communications NV on October 25, 2024 and sell it today you would earn a total of 60.00 from holding Digi Communications NV or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.33% |
| Values | Daily Returns |
Patria Bank SA vs. Digi Communications NV
Performance |
| Timeline |
| Patria Bank SA |
| Digi Communications |
Patria Bank and Digi Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patria Bank and Digi Communications
The main advantage of trading using opposite Patria Bank and Digi Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Bank 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.| Patria Bank vs. Turism Hotelur | Patria Bank vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Patria Bank vs. Erste Group Bank | Patria Bank vs. TRANSILVANIA INVESTMENTS ALLIANCE |
| Digi Communications vs. IHUNT TECHNOLOGY IMPORT EXPORT | Digi Communications vs. Evergent Investments SA | Digi Communications vs. Infinity Capital Investments | Digi Communications vs. Patria Bank SA |
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.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |