Correlation Between Enlivex Therapeutics and Digihost Technology

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

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

Diversification Opportunities for Enlivex Therapeutics and Digihost Technology

-0.79

Correlation Coefficient

Enlivex Therapeutics  Digihost Technology

Pay attention - limited upside

The 3 months correlation between Enlivex and Digihost is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Enlivex Therapeutics and Digihost Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digihost Technology and Enlivex Therapeutics 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 Enlivex Therapeutics are associated (or correlated) with Digihost Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digihost Technology has no effect on the direction of Enlivex Therapeutics i.e., Enlivex Therapeutics and Digihost Technology go up and down completely randomly.

Pair Corralation between Enlivex Therapeutics and Digihost Technology

Given the investment horizon of 90 days Enlivex Therapeutics is expected to under-perform the Digihost Technology. But the stock apears to be less risky and, when comparing its historical volatility, Enlivex Therapeutics is 1.35 times less risky than Digihost Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Digihost Technology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Digihost Technology on September 12, 2024 and sell it today you would earn a total of  74.00  from holding Digihost Technology or generate 61.67% return on investment over 90 days.

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

Enlivex Therapeutics  vs.  Digihost Technology

Enlivex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlivex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Digihost Technology

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Digihost Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting technical indicators, Digihost Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enlivex Therapeutics and Digihost Technology

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

The idea behind Enlivex Therapeutics and Digihost Technology 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .