Correlation Between Up Fintech and Applied Digital

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

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

Diversification Opportunities for Up Fintech and Applied Digital

-0.11

Correlation Coefficient

Up Fintech  Applied Digital

Good diversification

The 3 months correlation between TIGR and Applied is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Up Fintech Holding and Applied Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Digital and Up Fintech 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 Up Fintech Holding are associated (or correlated) with Applied Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Digital has no effect on the direction of Up Fintech i.e., Up Fintech and Applied Digital go up and down completely randomly.

Pair Corralation between Up Fintech and Applied Digital

Given the investment horizon of 90 days Up Fintech Holding is expected to generate 0.74 times more return on investment than Applied Digital. However, Up Fintech Holding is 1.36 times less risky than Applied Digital. It trades about 0.11 of its potential returns per unit of risk. Applied Digital is currently generating about -0.03 per unit of risk. If you would invest  689.00  in Up Fintech Holding on December 27, 2024 and sell it today you would earn a total of  221.00  from holding Up Fintech Holding or generate 32.08% return on investment over 90 days.

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

Up Fintech Holding  vs.  Applied Digital

Up Fintech Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Up Fintech Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Up Fintech reported solid returns over the last few months and may actually be approaching a breakup point.

Applied Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Applied Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Up Fintech and Applied Digital

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

The idea behind Up Fintech Holding and Applied Digital 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.