Correlation Between Digilife Technologies and SEKISUI CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Digilife Technologies and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL, you can compare the effects of market volatilities on Digilife Technologies and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and SEKISUI CHEMICAL.
Diversification Opportunities for Digilife Technologies and SEKISUI CHEMICAL
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digilife and SEKISUI is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and SEKISUI CHEMICAL go up and down completely randomly.
Pair Corralation between Digilife Technologies and SEKISUI CHEMICAL
Assuming the 90 days trading horizon Digilife Technologies Limited is expected to generate 3.65 times more return on investment than SEKISUI CHEMICAL. However, Digilife Technologies is 3.65 times more volatile than SEKISUI CHEMICAL. It trades about -0.09 of its potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about -0.44 per unit of risk. If you would invest 74.00 in Digilife Technologies Limited on October 28, 2024 and sell it today you would lose (7.00) from holding Digilife Technologies Limited or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digilife Technologies Limited vs. SEKISUI CHEMICAL
Performance |
| Timeline |
| Digilife Technologies |
| SEKISUI CHEMICAL |
Digilife Technologies and SEKISUI CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digilife Technologies and SEKISUI CHEMICAL
The main advantage of trading using opposite Digilife Technologies and SEKISUI CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife Technologies position performs unexpectedly, SEKISUI CHEMICAL 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 SEKISUI CHEMICAL will offset losses from the drop in SEKISUI CHEMICAL's long position.| Digilife Technologies vs. Globex Mining Enterprises | Digilife Technologies vs. Endeavour Mining PLC | Digilife Technologies vs. PPHE HOTEL GROUP | Digilife Technologies vs. Pebblebrook Hotel Trust |
| SEKISUI CHEMICAL vs. Host Hotels Resorts | SEKISUI CHEMICAL vs. Dalata Hotel Group | SEKISUI CHEMICAL vs. Meli Hotels International | SEKISUI CHEMICAL vs. NH HOTEL GROUP |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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