Correlation Between Digital Brands and Canlan Ice

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

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

Diversification Opportunities for Digital Brands and Canlan Ice

-0.3

Correlation Coefficient

Digital Brands  Canlan Ice

Very good diversification

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

Pair Corralation between Digital Brands and Canlan Ice

Given the investment horizon of 90 days Digital Brands Group, is expected to under-perform the Canlan Ice. But the stock apears to be less risky and, when comparing its historical volatility, Digital Brands Group, is 1.04 times less risky than Canlan Ice. The stock trades about -0.05 of its potential returns per unit of risk. The Canlan Ice Sports is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  262.00  in Canlan Ice Sports on August 17, 2025 and sell it today you would earn a total of  35.00  from holding Canlan Ice Sports or generate 13.36% return on investment over 90 days.

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

Digital Brands Group,  vs.  Canlan Ice Sports

Digital Brands Group,

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Digital Brands Group, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Digital Brands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Canlan Ice Sports

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Canlan Ice reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digital Brands and Canlan Ice

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

The idea behind Digital Brands Group, and Canlan Ice Sports 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.