Correlation Between Digilife Technologies and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Digilife Technologies and Collins Foods 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 Collins Foods 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 Collins Foods Limited, you can compare the effects of market volatilities on Digilife Technologies and Collins Foods 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 Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and Collins Foods.
Diversification Opportunities for Digilife Technologies and Collins Foods
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digilife and Collins is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and Collins Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods Limited 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods Limited has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and Collins Foods go up and down completely randomly.
Pair Corralation between Digilife Technologies and Collins Foods
Assuming the 90 days trading horizon Digilife Technologies is expected to generate 1.9 times less return on investment than Collins Foods. In addition to that, Digilife Technologies is 2.93 times more volatile than Collins Foods Limited. It trades about 0.04 of its total potential returns per unit of risk. Collins Foods Limited is currently generating about 0.2 per unit of volatility. If you would invest 494.00 in Collins Foods Limited on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Collins Foods Limited or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digilife Technologies Limited vs. Collins Foods Limited
Performance |
| Timeline |
| Digilife Technologies |
| Collins Foods Limited |
Digilife Technologies and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digilife Technologies and Collins Foods
The main advantage of trading using opposite Digilife Technologies and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife Technologies position performs unexpectedly, Collins Foods 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Digilife Technologies vs. ATT Inc | Digilife Technologies vs. Deutsche Telekom AG | Digilife Technologies vs. Superior Plus Corp | Digilife Technologies vs. NMI Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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