Correlation Between Alight and Digi International

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

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

Diversification Opportunities for Alight and Digi International

-0.6

Correlation Coefficient

Alight  Digi International

Excellent diversification

The 3 months correlation between Alight and Digi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alight Inc and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International and Alight 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 Alight Inc are associated (or correlated) with Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Alight i.e., Alight and Digi International go up and down completely randomly.

Pair Corralation between Alight and Digi International

Given the investment horizon of 90 days Alight Inc is expected to under-perform the Digi International. In addition to that, Alight is 1.25 times more volatile than Digi International. It trades about -0.31 of its total potential returns per unit of risk. Digi International is currently generating about 0.14 per unit of volatility. If you would invest  3,405  in Digi International on August 26, 2025 and sell it today you would earn a total of  685.00  from holding Digi International or generate 20.12% return on investment over 90 days.

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

Alight Inc  vs.  Digi International

Alight Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Alight Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in December 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Digi International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Digi International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Digi International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alight and Digi International

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

The idea behind Alight Inc and Digi International 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.