Correlation Between DGB and Plume

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

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

Diversification Opportunities for DGB and Plume

0.8

Correlation Coefficient

DGB  Plume

Very poor diversification

The 3 months correlation between DGB and Plume is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DGB and Plume in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plume and DGB 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 DGB are associated (or correlated) with Plume. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plume has no effect on the direction of DGB i.e., DGB and Plume go up and down completely randomly.

Pair Corralation between DGB and Plume

Assuming the 90 days trading horizon DGB is expected to generate 0.61 times more return on investment than Plume. However, DGB is 1.64 times less risky than Plume. It trades about -0.06 of its potential returns per unit of risk. Plume is currently generating about -0.11 per unit of risk. If you would invest  0.97  in DGB on May 7, 2025 and sell it today you would lose (0.18) from holding DGB or give up 18.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

DGB  vs.  Plume

DGB

Risk-Adjusted Performance

Weakest

Over the last 90 days DGB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental drivers remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for DGB shareholders.

Plume

Risk-Adjusted Performance

Weakest

Over the last 90 days Plume has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for Plume shareholders.

Pair Trading with DGB and Plume

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

The idea behind DGB and Plume 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.