Correlation Between Clearfield and Digi International
Can any of the company-specific risk be diversified away by investing in both Clearfield and Digi International 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 Clearfield and Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearfield and Digi International, you can compare the effects of market volatilities on Clearfield and Digi International 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 Clearfield with a short position of Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearfield and Digi International.
Diversification Opportunities for Clearfield and Digi International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearfield and Digi is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International and Clearfield 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 Clearfield are associated (or correlated) with Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Clearfield i.e., Clearfield and Digi International go up and down completely randomly.
Pair Corralation between Clearfield and Digi International
Given the investment horizon of 90 days Clearfield is expected to generate 0.79 times more return on investment than Digi International. However, Clearfield is 1.27 times less risky than Digi International. It trades about 0.38 of its potential returns per unit of risk. Digi International is currently generating about 0.23 per unit of risk. If you would invest 2,564 in Clearfield on April 5, 2025 and sell it today you would earn a total of 1,818 from holding Clearfield or generate 70.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Clearfield vs. Digi International
Performance |
Timeline |
Clearfield |
Digi International |
Clearfield and Digi International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Clearfield and Digi International
The main advantage of trading using opposite Clearfield and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International's long position.Clearfield vs. Catalyst Metals Limited | Clearfield vs. Electrovaya Common Shares | Clearfield vs. Cresud SACIF y | Clearfield vs. Sonos Inc |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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