Correlation Between Casa Systems and Digi International

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

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

Diversification Opportunities for Casa Systems and Digi International

0.0

Correlation Coefficient

Casa Systems  Digi International

Pay attention - limited upside

The 3 months correlation between Casa and Digi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Casa Systems and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International and Casa Systems 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 Casa Systems 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 Casa Systems i.e., Casa Systems and Digi International go up and down completely randomly.

Pair Corralation between Casa Systems and Digi International

If you would invest  3,022  in Digi International on November 30, 2024 and sell it today you would earn a total of  32.00  from holding Digi International or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Casa Systems  vs.  Digi International

Casa Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Casa Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Casa Systems is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Digi International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digi International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Casa Systems and Digi International

The main advantage of trading using opposite Casa Systems and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casa Systems 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.

The idea behind Casa Systems and Digi International 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..