Correlation Between DigiMax Global and ICOA

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

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

Diversification Opportunities for DigiMax Global and ICOA

0.2

Correlation Coefficient

DigiMax Global  ICOA

Modest diversification

The 3 months correlation between DigiMax and ICOA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DigiMax Global and ICOA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICOA Inc and DigiMax Global 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 DigiMax Global are associated (or correlated) with ICOA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICOA Inc has no effect on the direction of DigiMax Global i.e., DigiMax Global and ICOA go up and down completely randomly.

Pair Corralation between DigiMax Global and ICOA

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	Very Weak
Accuracy	95.24%
Values	Daily Returns

DigiMax Global  vs.  ICOA Inc

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.

ICOA Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with DigiMax Global and ICOA

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

The idea behind DigiMax Global and ICOA Inc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.