Correlation Between Auddia and Digihost Technology

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

By analyzing existing cross correlation between Auddia Inc and Digihost Technology, you can compare the effects of market volatilities on Auddia and Digihost Technology 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 Auddia with a short position of Digihost Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auddia and Digihost Technology.

Diversification Opportunities for Auddia and Digihost Technology

-0.52

Correlation Coefficient

Auddia  Digihost Technology

Excellent diversification

The 3 months correlation between Auddia and Digihost is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and Digihost Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digihost Technology and Auddia 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 Auddia Inc are associated (or correlated) with Digihost Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digihost Technology has no effect on the direction of Auddia i.e., Auddia and Digihost Technology go up and down completely randomly.

Pair Corralation between Auddia and Digihost Technology

Given the investment horizon of 90 days Auddia Inc is expected to under-perform the Digihost Technology. But the stock apears to be less risky and, when comparing its historical volatility, Auddia Inc is 1.41 times less risky than Digihost Technology. The stock trades about -0.15 of its potential returns per unit of risk. The Digihost Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  117.00  in Digihost Technology on September 4, 2024 and sell it today you would earn a total of  95.00  from holding Digihost Technology or generate 81.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Auddia Inc  vs.  Digihost Technology

Auddia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auddia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Digihost Technology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Digihost Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Digihost Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Auddia and Digihost Technology

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

The idea behind Auddia Inc and Digihost Technology 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.