Correlation Between Halitron and DigiMax Global

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

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

Diversification Opportunities for Halitron and DigiMax Global

0.0

Correlation Coefficient

Halitron  DigiMax Global

Pay attention - limited upside

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

Pair Corralation between Halitron and DigiMax Global

If you would invest  1.01  in DigiMax Global on December 30, 2024 and sell it today you would earn a total of  0.00  from holding DigiMax Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Halitron  vs.  DigiMax Global

Halitron

Risk-Adjusted Performance

Very Weak

Over the last 90 days Halitron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Halitron is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

DigiMax Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DigiMax Global are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DigiMax Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Halitron and DigiMax Global

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

The idea behind Halitron and DigiMax Global 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.