Correlation Between Global Digital and Zedcor

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

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

Diversification Opportunities for Global Digital and Zedcor

0.0

Correlation Coefficient

Global Digital  Zedcor

Pay attention - limited upside

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

Pair Corralation between Global Digital and Zedcor

Given the investment horizon of 90 days Global Digital Soltn is expected to generate 19.0 times more return on investment than Zedcor. However, Global Digital is 19.0 times more volatile than Zedcor Inc. It trades about 0.05 of its potential returns per unit of risk. Zedcor Inc is currently generating about 0.13 per unit of risk. If you would invest  2.19  in Global Digital Soltn on October 12, 2024 and sell it today you would lose (2.18) from holding Global Digital Soltn or give up 99.54% of portfolio value over 90 days.

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

Global Digital Soltn  vs.  Zedcor Inc

Global Digital Soltn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Digital Soltn has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Global Digital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Zedcor Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Zedcor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Digital and Zedcor

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

The idea behind Global Digital Soltn and Zedcor Inc 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.