Correlation Between Digital Power and Seers Technology
Can any of the company-specific risk be diversified away by investing in both Digital Power and Seers Technology 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 Digital Power and Seers Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and Seers Technology, you can compare the effects of market volatilities on Digital Power and Seers Technology 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 Digital Power with a short position of Seers Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Seers Technology.
Diversification Opportunities for Digital Power and Seers Technology
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Digital and Seers is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Seers Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seers Technology and Digital Power 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 Digital Power Communications are associated (or correlated) with Seers Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seers Technology has no effect on the direction of Digital Power i.e., Digital Power and Seers Technology go up and down completely randomly.
Pair Corralation between Digital Power and Seers Technology
Assuming the 90 days trading horizon Digital Power Communications is expected to generate 0.51 times more return on investment than Seers Technology. However, Digital Power Communications is 1.97 times less risky than Seers Technology. It trades about 0.04 of its potential returns per unit of risk. Seers Technology is currently generating about -0.02 per unit of risk. If you would invest 571,089 in Digital Power Communications on October 28, 2024 and sell it today you would earn a total of 246,911 from holding Digital Power Communications or generate 43.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 30.79% |
| Values | Daily Returns |
Digital Power Communications vs. Seers Technology
Performance |
| Timeline |
| Digital Power Commun |
| Seers Technology |
Digital Power and Seers Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Seers Technology
The main advantage of trading using opposite Digital Power and Seers Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, Seers Technology 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 Seers Technology will offset losses from the drop in Seers Technology's long position.| Digital Power vs. KB Financial Group | Digital Power vs. Shinhan Financial Group | Digital Power vs. Hana Financial | Digital Power vs. Woori Financial Group |
| Seers Technology vs. Samsung Electronics Co | Seers Technology vs. Samsung Electronics Co | Seers Technology vs. LG Energy Solution | Seers Technology vs. SK Hynix |
Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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