Correlation Between B Investments and Digitize For

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

By analyzing existing cross correlation between B Investments Holding and Digitize for Investment, you can compare the effects of market volatilities on B Investments and Digitize For 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 B Investments with a short position of Digitize For. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Investments and Digitize For.

Diversification Opportunities for B Investments and Digitize For

0.67

Correlation Coefficient

B Investments  Digitize For

Poor diversification

The 3 months correlation between BINV and Digitize is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding B Investments Holding and Digitize for Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digitize for Investment and B Investments 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 B Investments Holding are associated (or correlated) with Digitize For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digitize for Investment has no effect on the direction of B Investments i.e., B Investments and Digitize For go up and down completely randomly.

Pair Corralation between B Investments and Digitize For

Assuming the 90 days trading horizon B Investments is expected to generate 13.63 times less return on investment than Digitize For. But when comparing it to its historical volatility, B Investments Holding is 3.99 times less risky than Digitize For. It trades about 0.05 of its potential returns per unit of risk. Digitize for Investment is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  220.00  in Digitize for Investment on October 25, 2024 and sell it today you would earn a total of  99.00  from holding Digitize for Investment or generate 45.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.0%
Values	Daily Returns

B Investments Holding  vs.  Digitize for Investment

B Investments Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in B Investments Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, B Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Digitize for Investment

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Digitize for Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Digitize For reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with B Investments and Digitize For

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

The idea behind B Investments Holding and Digitize for Investment 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.