Correlation Between Neptune Digital and DigiMax Global

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

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

Diversification Opportunities for Neptune Digital and DigiMax Global

-0.13

Correlation Coefficient

Neptune Digital  DigiMax Global

Good diversification

The 3 months correlation between Neptune and DigiMax is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Neptune Digital Assets and DigiMax Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiMax Global and Neptune 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 Neptune Digital Assets 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 Neptune Digital i.e., Neptune Digital and DigiMax Global go up and down completely randomly.

Pair Corralation between Neptune Digital and DigiMax Global

Assuming the 90 days horizon Neptune Digital Assets is expected to generate 0.81 times more return on investment than DigiMax Global. However, Neptune Digital Assets is 1.23 times less risky than DigiMax Global. It trades about 0.17 of its potential returns per unit of risk. DigiMax Global is currently generating about -0.04 per unit of risk. If you would invest  19.00  in Neptune Digital Assets on September 3, 2024 and sell it today you would earn a total of  39.00  from holding Neptune Digital Assets or generate 205.26% return on investment over 90 days.

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

Neptune Digital Assets  vs.  DigiMax Global

Neptune Digital Assets

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neptune Digital Assets are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Neptune Digital reported solid returns over the last few months and may actually be approaching a breakup point.

DigiMax Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DigiMax Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Neptune Digital and DigiMax Global

The main advantage of trading using opposite Neptune Digital and DigiMax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neptune Digital 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 Neptune Digital Assets 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.