Correlation Between DigiMax Global and Lion Group

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

By analyzing existing cross correlation between DigiMax Global and Lion Group Holding, you can compare the effects of market volatilities on DigiMax Global and Lion Group 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 Lion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigiMax Global and Lion Group.

Diversification Opportunities for DigiMax Global and Lion Group

0.27

Correlation Coefficient

DigiMax Global  Lion Group

Modest diversification

The 3 months correlation between DigiMax and Lion is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding DigiMax Global and Lion Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Group Holding 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 Lion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Group Holding has no effect on the direction of DigiMax Global i.e., DigiMax Global and Lion Group go up and down completely randomly.

Pair Corralation between DigiMax Global and Lion Group

Assuming the 90 days horizon DigiMax Global is expected to under-perform the Lion Group. In addition to that, DigiMax Global is 2.71 times more volatile than Lion Group Holding. It trades about -0.04 of its total potential returns per unit of risk. Lion Group Holding is currently generating about 0.0 per unit of volatility. If you would invest  21.00  in Lion Group Holding on September 4, 2024 and sell it today you would lose (3.00) from holding Lion Group Holding or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

DigiMax Global  vs.  Lion Group Holding

DigiMax Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DigiMax Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Lion Group Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lion Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Lion Group is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with DigiMax Global and Lion Group

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

The idea behind DigiMax Global and Lion Group Holding 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.