Correlation Between Digi International and 60 Degrees

Can any of the company-specific risk be diversified away by investing in both Digi International and 60 Degrees 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 60 Degrees into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Digi International and 60 Degrees Pharmaceuticals,, you can compare the effects of market volatilities on Digi International and 60 Degrees 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 60 Degrees. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and 60 Degrees.

Diversification Opportunities for Digi International and 60 Degrees

-0.05

Correlation Coefficient

Digi International  60 Degrees

Good diversification

The 3 months correlation between Digi and SXTPW is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and 60 Degrees Pharmaceuticals, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 60 Degrees Pharmaceu 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 60 Degrees. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 60 Degrees Pharmaceu has no effect on the direction of Digi International i.e., Digi International and 60 Degrees go up and down completely randomly.

Pair Corralation between Digi International and 60 Degrees

Given the investment horizon of 90 days Digi International is expected to under-perform the 60 Degrees. But the stock apears to be less risky and, when comparing its historical volatility, Digi International is 11.65 times less risky than 60 Degrees. The stock trades about -0.05 of its potential returns per unit of risk. The 60 Degrees Pharmaceuticals, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1.50  in 60 Degrees Pharmaceuticals, on December 5, 2024 and sell it today you would earn a total of  0.75  from holding 60 Degrees Pharmaceuticals, or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.36%
Values	Daily Returns

Digi International  vs.  60 Degrees Pharmaceuticals,

Digi International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digi International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

60 Degrees Pharmaceu

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 60 Degrees Pharmaceuticals, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, 60 Degrees showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digi International and 60 Degrees

The main advantage of trading using opposite Digi International and 60 Degrees positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, 60 Degrees 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 60 Degrees will offset losses from the drop in 60 Degrees' long position.

The idea behind Digi International and 60 Degrees Pharmaceuticals, 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.