Correlation Between Reinsurance Group and Digilife Technologies
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and Digilife Technologies 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 Reinsurance Group and Digilife Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and Digilife Technologies Limited, you can compare the effects of market volatilities on Reinsurance Group and Digilife Technologies 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 Reinsurance Group with a short position of Digilife Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Digilife Technologies.
Diversification Opportunities for Reinsurance Group and Digilife Technologies
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Reinsurance and Digilife is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Digilife Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digilife Technologies and Reinsurance Group 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 Reinsurance Group of are associated (or correlated) with Digilife Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digilife Technologies has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and Digilife Technologies go up and down completely randomly.
Pair Corralation between Reinsurance Group and Digilife Technologies
Assuming the 90 days trading horizon Reinsurance Group of is expected to generate 0.27 times more return on investment than Digilife Technologies. However, Reinsurance Group of is 3.69 times less risky than Digilife Technologies. It trades about 0.17 of its potential returns per unit of risk. Digilife Technologies Limited is currently generating about -0.13 per unit of risk. If you would invest 21,200 in Reinsurance Group of on November 7, 2024 and sell it today you would earn a total of 1,000.00 from holding Reinsurance Group of or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. Digilife Technologies Limited
Performance |
| Timeline |
| Reinsurance Group |
| Digilife Technologies |
Reinsurance Group and Digilife Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Digilife Technologies
The main advantage of trading using opposite Reinsurance Group and Digilife Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, Digilife Technologies 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 Digilife Technologies will offset losses from the drop in Digilife Technologies' long position.| Reinsurance Group vs. USWE SPORTS AB | Reinsurance Group vs. JD SPORTS FASH | Reinsurance Group vs. NEWELL RUBBERMAID | Reinsurance Group vs. Materialise NV |
| Digilife Technologies vs. Genscript Biotech | Digilife Technologies vs. Siemens Healthineers AG | Digilife Technologies vs. G III Apparel Group | Digilife Technologies vs. Firan Technology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |