Correlation Between 01 Communique and I-On Digital

Can any of the company-specific risk be diversified away by investing in both 01 Communique and I-On Digital 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 01 Communique and I-On Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 01 Communique Laboratory and I On Digital Corp, you can compare the effects of market volatilities on 01 Communique and I-On Digital 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 01 Communique with a short position of I-On Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of 01 Communique and I-On Digital.

Diversification Opportunities for 01 Communique and I-On Digital

0.55

Correlation Coefficient

01 Communique  I-On Digital

Very weak diversification

The 3 months correlation between OONEF and I-On is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding 01 Communique Laboratory and I On Digital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I On Digital and 01 Communique 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 01 Communique Laboratory are associated (or correlated) with I-On Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I On Digital has no effect on the direction of 01 Communique i.e., 01 Communique and I-On Digital go up and down completely randomly.

Pair Corralation between 01 Communique and I-On Digital

Assuming the 90 days horizon 01 Communique is expected to generate 1.47 times less return on investment than I-On Digital. But when comparing it to its historical volatility, 01 Communique Laboratory is 1.85 times less risky than I-On Digital. It trades about 0.19 of its potential returns per unit of risk. I On Digital Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  48.00  in I On Digital Corp on May 3, 2025 and sell it today you would earn a total of  51.00  from holding I On Digital Corp or generate 106.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

01 Communique Laboratory  vs.  I On Digital Corp

01 Communique Laboratory

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 01 Communique Laboratory are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, 01 Communique reported solid returns over the last few months and may actually be approaching a breakup point.

I On Digital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in I On Digital Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, I-On Digital demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 01 Communique and I-On Digital

The main advantage of trading using opposite 01 Communique and I-On Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 01 Communique position performs unexpectedly, I-On Digital 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 I-On Digital will offset losses from the drop in I-On Digital's long position.

The idea behind 01 Communique Laboratory and I On Digital Corp 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.