Correlation Between Maverix Metals and Digi International

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

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

Diversification Opportunities for Maverix Metals and Digi International

0.0

Correlation Coefficient

Maverix Metals  Digi International

Pay attention - limited upside

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

Pair Corralation between Maverix Metals and Digi International

If you would invest  3,079  in Digi International on October 26, 2024 and sell it today you would earn a total of  165.00  from holding Digi International or generate 5.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Maverix Metals  vs.  Digi International

Maverix Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maverix Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Maverix Metals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Digi International

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Digi International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting forward indicators, Digi International may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Maverix Metals and Digi International

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

The idea behind Maverix Metals and Digi International 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.