Correlation Between Digital Turbine and ADEIA P

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

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

Diversification Opportunities for Digital Turbine and ADEIA P

0.81

Correlation Coefficient

Digital Turbine  ADEIA P

Very poor diversification

The 3 months correlation between Digital and ADEIA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Digital Turbine and ADEIA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADEIA P and Digital Turbine 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 Digital Turbine are associated (or correlated) with ADEIA P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADEIA P has no effect on the direction of Digital Turbine i.e., Digital Turbine and ADEIA P go up and down completely randomly.

Pair Corralation between Digital Turbine and ADEIA P

Given the investment horizon of 90 days Digital Turbine is expected to under-perform the ADEIA P. In addition to that, Digital Turbine is 1.75 times more volatile than ADEIA P. It trades about -0.1 of its total potential returns per unit of risk. ADEIA P is currently generating about 0.02 per unit of volatility. If you would invest  961.00  in ADEIA P on January 24, 2024 and sell it today you would earn a total of  77.00  from holding ADEIA P or generate 8.01% return on investment over 90 days.

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

Digital Turbine  vs.  ADEIA P

Digital Turbine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Digital Turbine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ADEIA P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADEIA P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Digital Turbine and ADEIA P

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

The idea behind Digital Turbine and ADEIA P 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.