Correlation Between New Concept and DigitalBridge

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

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

Diversification Opportunities for New Concept and DigitalBridge

0.09

Correlation Coefficient

New Concept  DigitalBridge

Significant diversification

The 3 months correlation between New and DigitalBridge is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding New Concept Energy and DigitalBridge Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigitalBridge Group and New Concept 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 New Concept Energy are associated (or correlated) with DigitalBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigitalBridge Group has no effect on the direction of New Concept i.e., New Concept and DigitalBridge go up and down completely randomly.

Pair Corralation between New Concept and DigitalBridge

Considering the 90-day investment horizon New Concept Energy is expected to under-perform the DigitalBridge. In addition to that, New Concept is 6.31 times more volatile than DigitalBridge Group. It trades about -0.12 of its total potential returns per unit of risk. DigitalBridge Group is currently generating about -0.08 per unit of volatility. If you would invest  2,438  in DigitalBridge Group on December 31, 2024 and sell it today you would lose (64.00) from holding DigitalBridge Group or give up 2.63% of portfolio value over 90 days.

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

New Concept Energy  vs.  DigitalBridge Group

New Concept Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days New Concept Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

DigitalBridge Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days DigitalBridge Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady forward-looking indicators, DigitalBridge is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with New Concept and DigitalBridge

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

The idea behind New Concept Energy and DigitalBridge Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.