Correlation Between Digi International and SVELEV

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

By analyzing existing cross correlation between Digi International and SVELEV 25 10 FEB 41, you can compare the effects of market volatilities on Digi International and SVELEV 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 SVELEV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and SVELEV.

Diversification Opportunities for Digi International and SVELEV

-0.51

Correlation Coefficient

Digi International  SVELEV

Excellent diversification

The 3 months correlation between Digi and SVELEV is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and SVELEV 25 10 FEB 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVELEV 25 10 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 SVELEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVELEV 25 10 has no effect on the direction of Digi International i.e., Digi International and SVELEV go up and down completely randomly.

Pair Corralation between Digi International and SVELEV

Given the investment horizon of 90 days Digi International is expected to generate 2.98 times more return on investment than SVELEV. However, Digi International is 2.98 times more volatile than SVELEV 25 10 FEB 41. It trades about 0.13 of its potential returns per unit of risk. SVELEV 25 10 FEB 41 is currently generating about -0.17 per unit of risk. If you would invest  2,813  in Digi International on September 5, 2024 and sell it today you would earn a total of  511.00  from holding Digi International or generate 18.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.02%
Values	Daily Returns

Digi International  vs.  SVELEV 25 10 FEB 41

Digi International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Digi International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Digi International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SVELEV 25 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVELEV 25 10 FEB 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SVELEV 25 10 FEB 41 investors.

Pair Trading with Digi International and SVELEV

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

The idea behind Digi International and SVELEV 25 10 FEB 41 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.