Correlation Between DNB BANK and Digilife Technologies
Can any of the company-specific risk be diversified away by investing in both DNB BANK and Digilife Technologies 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 DNB BANK and Digilife Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DNB BANK ASA and Digilife Technologies Limited, you can compare the effects of market volatilities on DNB BANK and Digilife Technologies 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 DNB BANK with a short position of Digilife Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of DNB BANK and Digilife Technologies.
Diversification Opportunities for DNB BANK and Digilife Technologies
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DNB and Digilife is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding DNB BANK ASA and Digilife Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digilife Technologies and DNB BANK 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 DNB BANK ASA are associated (or correlated) with Digilife Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digilife Technologies has no effect on the direction of DNB BANK i.e., DNB BANK and Digilife Technologies go up and down completely randomly.
Pair Corralation between DNB BANK and Digilife Technologies
Assuming the 90 days trading horizon DNB BANK ASA is expected to generate 0.53 times more return on investment than Digilife Technologies. However, DNB BANK ASA is 1.89 times less risky than Digilife Technologies. It trades about 0.18 of its potential returns per unit of risk. Digilife Technologies Limited is currently generating about -0.02 per unit of risk. If you would invest 1,893 in DNB BANK ASA on September 4, 2024 and sell it today you would earn a total of 197.00 from holding DNB BANK ASA or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
DNB BANK ASA vs. Digilife Technologies Limited
Performance |
| Timeline |
| DNB BANK ASA |
| Digilife Technologies |
DNB BANK and Digilife Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DNB BANK and Digilife Technologies
The main advantage of trading using opposite DNB BANK and Digilife Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DNB BANK position performs unexpectedly, Digilife Technologies 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 Digilife Technologies will offset losses from the drop in Digilife Technologies' long position.| DNB BANK vs. Transportadora de Gas | DNB BANK vs. SPORT LISBOA E | DNB BANK vs. URBAN OUTFITTERS | DNB BANK vs. Big 5 Sporting |
| Digilife Technologies vs. T Mobile | Digilife Technologies vs. China Mobile Limited | Digilife Technologies vs. ATT Inc | Digilife Technologies vs. Nippon Telegraph and |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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