Correlation Between Coin Citadel and DigiMax Global

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

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

Diversification Opportunities for Coin Citadel and DigiMax Global

0.01

Correlation Coefficient

Coin Citadel  DigiMax Global

Significant diversification

The 3 months correlation between Coin and DigiMax is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Coin Citadel and DigiMax Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiMax Global and Coin Citadel 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 Coin Citadel 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 Coin Citadel i.e., Coin Citadel and DigiMax Global go up and down completely randomly.

Pair Corralation between Coin Citadel and DigiMax Global

Given the investment horizon of 90 days Coin Citadel is expected to generate 22.29 times less return on investment than DigiMax Global. But when comparing it to its historical volatility, Coin Citadel is 5.64 times less risky than DigiMax Global. It trades about 0.04 of its potential returns per unit of risk. DigiMax Global is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1.01  in DigiMax Global on December 28, 2024 and sell it today you would earn a total of  0.00  from holding DigiMax Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Coin Citadel  vs.  DigiMax Global

Coin Citadel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coin Citadel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Coin Citadel disclosed solid returns over the last few months and may actually be approaching a breakup point.

DigiMax Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DigiMax Global are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DigiMax Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coin Citadel and DigiMax Global

The main advantage of trading using opposite Coin Citadel and DigiMax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coin Citadel 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 Coin Citadel 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.