Correlation Between BIG Blockchain and DigiMax Global

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

By analyzing existing cross correlation between BIG Blockchain Intelligence and DigiMax Global, you can compare the effects of market volatilities on BIG Blockchain and DigiMax Global 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 BIG Blockchain with a short position of DigiMax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIG Blockchain and DigiMax Global.

Diversification Opportunities for BIG Blockchain and DigiMax Global

-0.21

Correlation Coefficient

BIG Blockchain  DigiMax Global

Very good diversification

The 3 months correlation between BIG and DigiMax is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BIG Blockchain Intelligence and DigiMax Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiMax Global and BIG Blockchain 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 BIG Blockchain Intelligence are associated (or correlated) with DigiMax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiMax Global has no effect on the direction of BIG Blockchain i.e., BIG Blockchain and DigiMax Global go up and down completely randomly.

Pair Corralation between BIG Blockchain and DigiMax Global

Assuming the 90 days horizon BIG Blockchain Intelligence is expected to generate 0.4 times more return on investment than DigiMax Global. However, BIG Blockchain Intelligence is 2.5 times less risky than DigiMax Global. It trades about 0.11 of its potential returns per unit of risk. DigiMax Global is currently generating about -0.04 per unit of risk. If you would invest  9.70  in BIG Blockchain Intelligence on September 4, 2024 and sell it today you would earn a total of  4.30  from holding BIG Blockchain Intelligence or generate 44.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BIG Blockchain Intelligence  vs.  DigiMax Global

BIG Blockchain Intel

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BIG Blockchain Intelligence are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, BIG Blockchain reported solid returns over the last few months and may actually be approaching a breakup point.

DigiMax Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DigiMax Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BIG Blockchain and DigiMax Global

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

The idea behind BIG Blockchain Intelligence and DigiMax Global 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.