Correlation Between Mediaco Holding and Digital Brands

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

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

Diversification Opportunities for Mediaco Holding and Digital Brands

0.0

Correlation Coefficient

Mediaco Holding  Digital Brands

Pay attention - limited upside

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

Pair Corralation between Mediaco Holding and Digital Brands

If you would invest  114.00  in Mediaco Holding on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Mediaco Holding or generate 0.0% return on investment over 90 days.

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

Mediaco Holding  vs.  Digital Brands Group

Mediaco Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mediaco Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Mediaco Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Digital Brands Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Mediaco Holding and Digital Brands

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

The idea behind Mediaco Holding and Digital Brands 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.