Correlation Between Digitize For and Cleopatra Hospital

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

By analyzing existing cross correlation between Digitize for Investment and Cleopatra Hospital, you can compare the effects of market volatilities on Digitize For and Cleopatra Hospital 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 Digitize For with a short position of Cleopatra Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digitize For and Cleopatra Hospital.

Diversification Opportunities for Digitize For and Cleopatra Hospital

0.47

Correlation Coefficient

Digitize For  Cleopatra Hospital

Very weak diversification

The 3 months correlation between Digitize and Cleopatra is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Digitize for Investment and Cleopatra Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleopatra Hospital and Digitize For 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 Digitize for Investment are associated (or correlated) with Cleopatra Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleopatra Hospital has no effect on the direction of Digitize For i.e., Digitize For and Cleopatra Hospital go up and down completely randomly.

Pair Corralation between Digitize For and Cleopatra Hospital

Assuming the 90 days trading horizon Digitize for Investment is expected to generate 2.11 times more return on investment than Cleopatra Hospital. However, Digitize For is 2.11 times more volatile than Cleopatra Hospital. It trades about 0.28 of its potential returns per unit of risk. Cleopatra Hospital is currently generating about -0.01 per unit of risk. If you would invest  190.00  in Digitize for Investment on October 11, 2024 and sell it today you would earn a total of  147.00  from holding Digitize for Investment or generate 77.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Digitize for Investment  vs.  Cleopatra Hospital

Digitize for Investment

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Digitize for Investment are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Digitize For reported solid returns over the last few months and may actually be approaching a breakup point.

Cleopatra Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleopatra Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Cleopatra Hospital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Digitize For and Cleopatra Hospital

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

The idea behind Digitize for Investment and Cleopatra Hospital 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.