Correlation Between Digilife Technologies and Pick N
Can any of the company-specific risk be diversified away by investing in both Digilife Technologies and Pick N 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 Pick N 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 Pick n Pay, you can compare the effects of market volatilities on Digilife Technologies and Pick N 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 Pick N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and Pick N.
Diversification Opportunities for Digilife Technologies and Pick N
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digilife and Pick is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and Pick n Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick n Pay 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 Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick n Pay has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and Pick N go up and down completely randomly.
Pair Corralation between Digilife Technologies and Pick N
Assuming the 90 days trading horizon Digilife Technologies is expected to generate 13.01 times less return on investment than Pick N. But when comparing it to its historical volatility, Digilife Technologies Limited is 6.48 times less risky than Pick N. It trades about 0.02 of its potential returns per unit of risk. Pick n Pay is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Pick n Pay on September 2, 2024 and sell it today you would lose (175.00) from holding Pick n Pay or give up 53.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digilife Technologies Limited vs. Pick n Pay
Performance |
| Timeline |
| Digilife Technologies |
| Pick n Pay |
Digilife Technologies and Pick N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digilife Technologies and Pick N
The main advantage of trading using opposite Digilife Technologies and Pick N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife Technologies position performs unexpectedly, Pick N 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 Pick N will offset losses from the drop in Pick N's long position.| Digilife Technologies vs. MCEWEN MINING INC | Digilife Technologies vs. Lion One Metals | Digilife Technologies vs. Seven West Media | Digilife Technologies vs. GALENA MINING LTD |
| Pick N vs. Taiwan Semiconductor Manufacturing | Pick N vs. AUSTEVOLL SEAFOOD | Pick N vs. Tower Semiconductor | Pick N vs. CN MODERN DAIRY |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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