Correlation Between BBTV Holdings and DGTL Holdings

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

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

Diversification Opportunities for BBTV Holdings and DGTL Holdings

0.33

Correlation Coefficient

BBTV Holdings  DGTL Holdings

Weak diversification

The 3 months correlation between BBTV and DGTL is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding BBTV Holdings and DGTL Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DGTL Holdings and BBTV Holdings 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 BBTV Holdings are associated (or correlated) with DGTL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DGTL Holdings has no effect on the direction of BBTV Holdings i.e., BBTV Holdings and DGTL Holdings go up and down completely randomly.

Pair Corralation between BBTV Holdings and DGTL Holdings

If you would invest  23.00  in DGTL Holdings on September 15, 2024 and sell it today you would lose (22.40) from holding DGTL Holdings or give up 97.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.79%
Values	Daily Returns

BBTV Holdings  vs.  DGTL Holdings

BBTV Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BBTV Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BBTV Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

DGTL Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DGTL Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, DGTL Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BBTV Holdings and DGTL Holdings

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

The idea behind BBTV Holdings and DGTL Holdings 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.