Correlation Between DigitalBridge and Alta Global

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

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

Diversification Opportunities for DigitalBridge and Alta Global

-0.4

Correlation Coefficient

DigitalBridge  Alta Global

Very good diversification

The 3 months correlation between DigitalBridge and Alta is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding DigitalBridge Group and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global Group and DigitalBridge 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 DigitalBridge Group are associated (or correlated) with Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of DigitalBridge i.e., DigitalBridge and Alta Global go up and down completely randomly.

Pair Corralation between DigitalBridge and Alta Global

Assuming the 90 days trading horizon DigitalBridge is expected to generate 11.37 times less return on investment than Alta Global. But when comparing it to its historical volatility, DigitalBridge Group is 5.01 times less risky than Alta Global. It trades about 0.04 of its potential returns per unit of risk. Alta Global Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  83.00  in Alta Global Group on May 4, 2025 and sell it today you would earn a total of  19.00  from holding Alta Global Group or generate 22.89% return on investment over 90 days.

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

DigitalBridge Group  vs.  Alta Global Group

DigitalBridge Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DigitalBridge Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady forward-looking indicators, DigitalBridge is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

Alta Global Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alta Global Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent primary indicators, Alta Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DigitalBridge and Alta Global

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

The idea behind DigitalBridge Group and Alta Global 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.