Correlation Between Discovery Holdings and Sygnia

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

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

Diversification Opportunities for Discovery Holdings and Sygnia

0.0

Correlation Coefficient

Discovery Holdings  Sygnia

Pay attention - limited upside

The 3 months correlation between Discovery and Sygnia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Discovery Holdings and Sygnia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sygnia and Discovery Holdings 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 Discovery Holdings are associated (or correlated) with Sygnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sygnia has no effect on the direction of Discovery Holdings i.e., Discovery Holdings and Sygnia go up and down completely randomly.

Pair Corralation between Discovery Holdings and Sygnia

If you would invest  0.00  in Discovery Holdings on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Discovery Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Discovery Holdings  vs.  Sygnia

Discovery Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Discovery Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Discovery Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Sygnia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sygnia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Discovery Holdings and Sygnia

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

The idea behind Discovery Holdings and Sygnia 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.