Correlation Between Digital Turbine and ARDAGH METAL

Can any of the company-specific risk be diversified away by investing in both Digital Turbine and ARDAGH METAL 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 Digital Turbine and ARDAGH METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Digital Turbine and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on Digital Turbine and ARDAGH METAL 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 Digital Turbine with a short position of ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Turbine and ARDAGH METAL.

Diversification Opportunities for Digital Turbine and ARDAGH METAL

0.27

Correlation Coefficient

Digital Turbine  ARDAGH METAL

Modest diversification

The 3 months correlation between Digital and ARDAGH is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Digital Turbine and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL and Digital Turbine 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 Digital Turbine are associated (or correlated) with ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of Digital Turbine i.e., Digital Turbine and ARDAGH METAL go up and down completely randomly.

Pair Corralation between Digital Turbine and ARDAGH METAL

Assuming the 90 days horizon Digital Turbine is expected to generate 1.42 times more return on investment than ARDAGH METAL. However, Digital Turbine is 1.42 times more volatile than ARDAGH METAL PACDL 0001. It trades about 0.24 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about -0.11 per unit of risk. If you would invest  130.00  in Digital Turbine on October 10, 2024 and sell it today you would earn a total of  67.00  from holding Digital Turbine or generate 51.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Digital Turbine  vs.  ARDAGH METAL PACDL 0001

Digital Turbine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Digital Turbine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ARDAGH METAL PACDL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARDAGH METAL PACDL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Digital Turbine and ARDAGH METAL

The main advantage of trading using opposite Digital Turbine and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Turbine position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.

The idea behind Digital Turbine and ARDAGH METAL PACDL 0001 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.