Correlation Between Tuksu Engineering and Digital Imaging

Can any of the company-specific risk be diversified away by investing in both Tuksu Engineering and Digital Imaging 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 Tuksu Engineering and Digital Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tuksu Engineering ConstructionLtd and Digital Imaging Technology, you can compare the effects of market volatilities on Tuksu Engineering and Digital Imaging 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 Tuksu Engineering with a short position of Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuksu Engineering and Digital Imaging.

Diversification Opportunities for Tuksu Engineering and Digital Imaging

-0.33

Correlation Coefficient

Tuksu Engineering  Digital Imaging

Very good diversification

The 3 months correlation between Tuksu and Digital is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Tuksu Engineering Construction and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech and Tuksu Engineering 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 Tuksu Engineering ConstructionLtd are associated (or correlated) with Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of Tuksu Engineering i.e., Tuksu Engineering and Digital Imaging go up and down completely randomly.

Pair Corralation between Tuksu Engineering and Digital Imaging

Assuming the 90 days trading horizon Tuksu Engineering is expected to generate 148.3 times less return on investment than Digital Imaging. But when comparing it to its historical volatility, Tuksu Engineering ConstructionLtd is 1.92 times less risky than Digital Imaging. It trades about 0.0 of its potential returns per unit of risk. Digital Imaging Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  528,804  in Digital Imaging Technology on September 21, 2024 and sell it today you would earn a total of  766,196  from holding Digital Imaging Technology or generate 144.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tuksu Engineering Construction  vs.  Digital Imaging Technology

Tuksu Engineering

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tuksu Engineering ConstructionLtd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tuksu Engineering sustained solid returns over the last few months and may actually be approaching a breakup point.

Digital Imaging Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Digital Imaging Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Tuksu Engineering and Digital Imaging

The main advantage of trading using opposite Tuksu Engineering and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuksu Engineering position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging's long position.

The idea behind Tuksu Engineering ConstructionLtd and Digital Imaging Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.