Correlation Between Vertoz Advertising and Digjam

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

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

Diversification Opportunities for Vertoz Advertising and Digjam

0.25

Correlation Coefficient

Vertoz Advertising  Digjam

Modest diversification

The 3 months correlation between Vertoz and Digjam is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Vertoz Advertising Limited and Digjam Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digjam Limited and Vertoz Advertising 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 Vertoz Advertising Limited are associated (or correlated) with Digjam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digjam Limited has no effect on the direction of Vertoz Advertising i.e., Vertoz Advertising and Digjam go up and down completely randomly.

Pair Corralation between Vertoz Advertising and Digjam

Assuming the 90 days trading horizon Vertoz Advertising Limited is expected to generate 45.73 times more return on investment than Digjam. However, Vertoz Advertising is 45.73 times more volatile than Digjam Limited. It trades about 0.09 of its potential returns per unit of risk. Digjam Limited is currently generating about -0.01 per unit of risk. If you would invest  1,097  in Vertoz Advertising Limited on September 5, 2024 and sell it today you would earn a total of  395.00  from holding Vertoz Advertising Limited or generate 36.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.98%
Values	Daily Returns

Vertoz Advertising Limited  vs.  Digjam Limited

Vertoz Advertising

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vertoz Advertising Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Digjam Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Digjam Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Digjam may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vertoz Advertising and Digjam

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

The idea behind Vertoz Advertising Limited and Digjam Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.