Correlation Between ENGlobal and Digital Locations

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

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

Diversification Opportunities for ENGlobal and Digital Locations

0.0

Correlation Coefficient

ENGlobal  Digital Locations

Pay attention - limited upside

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

Pair Corralation between ENGlobal and Digital Locations

If you would invest (100.00) in ENGlobal on December 23, 2024 and sell it today you would earn a total of  100.00  from holding ENGlobal or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ENGlobal  vs.  Digital Locations

ENGlobal

Risk-Adjusted Performance

Very Weak

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

Digital Locations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digital Locations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ENGlobal and Digital Locations

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

The idea behind ENGlobal and Digital Locations 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.