Correlation Between Digi International and World Kinect

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

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

Diversification Opportunities for Digi International and World Kinect

-0.03

Correlation Coefficient

Digi International  World Kinect

Good diversification

The 3 months correlation between Digi and World is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and World Kinect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Kinect and Digi International 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 Digi International are associated (or correlated) with World Kinect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Kinect has no effect on the direction of Digi International i.e., Digi International and World Kinect go up and down completely randomly.

Pair Corralation between Digi International and World Kinect

Given the investment horizon of 90 days Digi International is expected to generate 1.47 times more return on investment than World Kinect. However, Digi International is 1.47 times more volatile than World Kinect. It trades about 0.07 of its potential returns per unit of risk. World Kinect is currently generating about -0.12 per unit of risk. If you would invest  3,371  in Digi International on July 11, 2025 and sell it today you would earn a total of  285.00  from holding Digi International or generate 8.45% return on investment over 90 days.

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

Digi International  vs.  World Kinect

Digi International

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Digi International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Digi International may actually be approaching a critical reversion point that can send shares even higher in November 2025.

World Kinect

Risk-Adjusted Performance

Weakest

Over the last 90 days World Kinect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward-looking signals remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Digi International and World Kinect

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

The idea behind Digi International and World Kinect 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.