Correlation Between DigiAsia Corp and Tenable Holdings

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

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

Diversification Opportunities for DigiAsia Corp and Tenable Holdings

0.7

Correlation Coefficient

DigiAsia Corp  Tenable Holdings

Poor diversification

The 3 months correlation between DigiAsia and Tenable is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DigiAsia Corp and Tenable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenable Holdings and DigiAsia Corp 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 DigiAsia Corp are associated (or correlated) with Tenable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenable Holdings has no effect on the direction of DigiAsia Corp i.e., DigiAsia Corp and Tenable Holdings go up and down completely randomly.

Pair Corralation between DigiAsia Corp and Tenable Holdings

Assuming the 90 days horizon DigiAsia Corp is expected to generate 10.57 times more return on investment than Tenable Holdings. However, DigiAsia Corp is 10.57 times more volatile than Tenable Holdings. It trades about 0.01 of its potential returns per unit of risk. Tenable Holdings is currently generating about -0.27 per unit of risk. If you would invest  6.49  in DigiAsia Corp on January 18, 2025 and sell it today you would lose (3.18) from holding DigiAsia Corp or give up 49.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

DigiAsia Corp  vs.  Tenable Holdings

DigiAsia Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days DigiAsia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Tenable Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tenable Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with DigiAsia Corp and Tenable Holdings

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

The idea behind DigiAsia Corp and Tenable Holdings 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.