Correlation Between Digi International and Micromobility

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

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

Diversification Opportunities for Digi International and Micromobility

-0.84

Correlation Coefficient

Digi International  Micromobility

Pay attention - limited upside

The 3 months correlation between Digi and Micromobility is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Micromobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micromobility and Digi International 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 Digi International are associated (or correlated) with Micromobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micromobility has no effect on the direction of Digi International i.e., Digi International and Micromobility go up and down completely randomly.

Pair Corralation between Digi International and Micromobility

Given the investment horizon of 90 days Digi International is expected to generate 0.19 times more return on investment than Micromobility. However, Digi International is 5.32 times less risky than Micromobility. It trades about 0.0 of its potential returns per unit of risk. Micromobility is currently generating about -0.17 per unit of risk. If you would invest  3,638  in Digi International on September 29, 2024 and sell it today you would lose (598.00) from holding Digi International or give up 16.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	27.42%
Values	Daily Returns

Digi International  vs.  Micromobility

Digi International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Digi International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, Digi International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Micromobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micromobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Micromobility is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Digi International and Micromobility

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

The idea behind Digi International and Micromobility 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..