Correlation Between Direct Digital and MGO Global

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

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

Diversification Opportunities for Direct Digital and MGO Global

0.0

Correlation Coefficient

Direct Digital  MGO Global

Pay attention - limited upside

The 3 months correlation between Direct and MGO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Direct Digital Holdings and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common and Direct Digital 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 Direct Digital Holdings are associated (or correlated) with MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of Direct Digital i.e., Direct Digital and MGO Global go up and down completely randomly.

Pair Corralation between Direct Digital and MGO Global

If you would invest  115.00  in Direct Digital Holdings on February 3, 2025 and sell it today you would lose (29.00) from holding Direct Digital Holdings or give up 25.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Direct Digital Holdings  vs.  MGO Global Common

Direct Digital Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Direct Digital Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Direct Digital unveiled solid returns over the last few months and may actually be approaching a breakup point.

MGO Global Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days MGO Global Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, MGO Global is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Direct Digital and MGO Global

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

The idea behind Direct Digital Holdings and MGO Global Common 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.