Correlation Between DGTL Holdings and Lumine

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

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

Diversification Opportunities for DGTL Holdings and Lumine

-0.3

Correlation Coefficient

DGTL Holdings  Lumine

Very good diversification

The 3 months correlation between DGTL and Lumine is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding DGTL Holdings and Lumine Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumine Group and DGTL 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 DGTL Holdings are associated (or correlated) with Lumine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumine Group has no effect on the direction of DGTL Holdings i.e., DGTL Holdings and Lumine go up and down completely randomly.

Pair Corralation between DGTL Holdings and Lumine

Assuming the 90 days trading horizon DGTL Holdings is expected to under-perform the Lumine. In addition to that, DGTL Holdings is 1.37 times more volatile than Lumine Group. It trades about -0.12 of its total potential returns per unit of risk. Lumine Group is currently generating about 0.16 per unit of volatility. If you would invest  3,470  in Lumine Group on September 14, 2024 and sell it today you would earn a total of  920.00  from holding Lumine Group or generate 26.51% return on investment over 90 days.

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

DGTL Holdings  vs.  Lumine Group

DGTL Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DGTL Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Lumine Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lumine Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Lumine showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DGTL Holdings and Lumine

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

The idea behind DGTL Holdings and Lumine Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.