Correlation Between Digilife Technologies and ATT
Can any of the company-specific risk be diversified away by investing in both Digilife Technologies and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Digilife Technologies and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and ATT.
Diversification Opportunities for Digilife Technologies and ATT
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digilife and ATT is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and ATT go up and down completely randomly.
Pair Corralation between Digilife Technologies and ATT
Assuming the 90 days trading horizon Digilife Technologies Limited is expected to generate 3.11 times more return on investment than ATT. However, Digilife Technologies is 3.11 times more volatile than ATT Inc. It trades about 0.02 of its potential returns per unit of risk. ATT Inc is currently generating about 0.05 per unit of risk. If you would invest 89.00 in Digilife Technologies Limited on September 3, 2024 and sell it today you would lose (11.00) from holding Digilife Technologies Limited or give up 12.36% 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. ATT Inc
Performance |
| Timeline |
| Digilife Technologies |
| ATT Inc |
Digilife Technologies and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digilife Technologies and ATT
The main advantage of trading using opposite Digilife Technologies and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife Technologies position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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