Correlation Between SM Investments and DigiPlus Interactive

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

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

Diversification Opportunities for SM Investments and DigiPlus Interactive

0.31

Correlation Coefficient

SM Investments  DigiPlus Interactive

Weak diversification

The 3 months correlation between SM Investments and DigiPlus is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments Corp and DigiPlus Interactive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiPlus Interactive Corp and SM Investments 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 SM Investments Corp are associated (or correlated) with DigiPlus Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiPlus Interactive Corp has no effect on the direction of SM Investments i.e., SM Investments and DigiPlus Interactive go up and down completely randomly.

Pair Corralation between SM Investments and DigiPlus Interactive

Assuming the 90 days trading horizon SM Investments Corp is expected to generate 0.22 times more return on investment than DigiPlus Interactive. However, SM Investments Corp is 4.48 times less risky than DigiPlus Interactive. It trades about 0.01 of its potential returns per unit of risk. DigiPlus Interactive Corp is currently generating about -0.1 per unit of risk. If you would invest  82,310  in SM Investments Corp on April 24, 2025 and sell it today you would earn a total of  540.00  from holding SM Investments Corp or generate 0.66% return on investment over 90 days.

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

SM Investments Corp  vs.  DigiPlus Interactive Corp

SM Investments Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SM Investments Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SM Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

DigiPlus Interactive Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SM Investments and DigiPlus Interactive

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

The idea behind SM Investments Corp and DigiPlus Interactive 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.