Correlation Between Castellum and Digatrade Financial

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

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

Diversification Opportunities for Castellum and Digatrade Financial

0.0

Correlation Coefficient

Castellum  Digatrade Financial

Pay attention - limited upside

The 3 months correlation between Castellum and Digatrade is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Castellum and Digatrade Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digatrade Financial Corp and Castellum 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 Castellum are associated (or correlated) with Digatrade Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digatrade Financial Corp has no effect on the direction of Castellum i.e., Castellum and Digatrade Financial go up and down completely randomly.

Pair Corralation between Castellum and Digatrade Financial

If you would invest  0.01  in Digatrade Financial Corp on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Digatrade Financial Corp or generate 0.0% return on investment over 90 days.

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

Castellum  vs.  Digatrade Financial Corp

Castellum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castellum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Digatrade Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digatrade Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Digatrade Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Castellum and Digatrade Financial

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

The idea behind Castellum and Digatrade Financial Corp 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.