Correlation Between Veeco Instruments and Digi International
Can any of the company-specific risk be diversified away by investing in both Veeco Instruments 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 Veeco Instruments and Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veeco Instruments and Digi International, you can compare the effects of market volatilities on Veeco Instruments 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 Veeco Instruments with a short position of Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veeco Instruments and Digi International.
Diversification Opportunities for Veeco Instruments and Digi International
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Veeco and Digi is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International and Veeco Instruments 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 Veeco Instruments 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 Veeco Instruments i.e., Veeco Instruments and Digi International go up and down completely randomly.
Pair Corralation between Veeco Instruments and Digi International
Given the investment horizon of 90 days Veeco Instruments is expected to under-perform the Digi International. In addition to that, Veeco Instruments is 1.08 times more volatile than Digi International. It trades about -0.09 of its total potential returns per unit of risk. Digi International is currently generating about 0.12 per unit of volatility. If you would invest 2,827 in Digi International on August 31, 2024 and sell it today you would earn a total of 440.00 from holding Digi International or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veeco Instruments vs. Digi International
Performance |
| Timeline |
| Veeco Instruments |
| Digi International |
Veeco Instruments and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veeco Instruments and Digi International
The main advantage of trading using opposite Veeco Instruments and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeco Instruments 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.| Veeco Instruments vs. NVE Corporation | Veeco Instruments vs. Photronics | Veeco Instruments vs. Kulicke and Soffa | Veeco Instruments vs. Alvarium Tiedemann Holdings |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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