Correlation Between Digilife Technologies and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Digilife Technologies and Lion Biotechnologies 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 Digilife Technologies and Lion Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digilife Technologies Limited and Lion Biotechnologies, you can compare the effects of market volatilities on Digilife Technologies and Lion Biotechnologies 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 Digilife Technologies with a short position of Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and Lion Biotechnologies.
Diversification Opportunities for Digilife Technologies and Lion Biotechnologies
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Digilife and Lion is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies and Digilife Technologies 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 Digilife Technologies Limited are associated (or correlated) with Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between Digilife Technologies and Lion Biotechnologies
Assuming the 90 days trading horizon Digilife Technologies Limited is expected to generate 0.94 times more return on investment than Lion Biotechnologies. However, Digilife Technologies Limited is 1.06 times less risky than Lion Biotechnologies. It trades about -0.03 of its potential returns per unit of risk. Lion Biotechnologies is currently generating about -0.03 per unit of risk. If you would invest 86.00 in Digilife Technologies Limited on August 29, 2024 and sell it today you would lose (10.00) from holding Digilife Technologies Limited or give up 11.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digilife Technologies Limited vs. Lion Biotechnologies
Performance |
| Timeline |
| Digilife Technologies |
| Lion Biotechnologies |
Digilife Technologies and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digilife Technologies and Lion Biotechnologies
The main advantage of trading using opposite Digilife Technologies and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife Technologies position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.| Digilife Technologies vs. T Mobile | Digilife Technologies vs. ATT Inc | Digilife Technologies vs. Deutsche Telekom AG |
| Lion Biotechnologies vs. Nucletron Electronic Aktiengesellschaft | Lion Biotechnologies vs. ELECTRONIC ARTS | Lion Biotechnologies vs. Electronic Arts | Lion Biotechnologies vs. BYD ELECTRONIC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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