Correlation Between Digital Imaging and Daishin Information

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

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

Diversification Opportunities for Digital Imaging and Daishin Information

0.12

Correlation Coefficient

Digital Imaging  Daishin Information

Average diversification

The 3 months correlation between Digital and Daishin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Digital Imaging Technology and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information and Digital Imaging 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 Digital Imaging Technology are associated (or correlated) with Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Digital Imaging i.e., Digital Imaging and Daishin Information go up and down completely randomly.

Pair Corralation between Digital Imaging and Daishin Information

Assuming the 90 days trading horizon Digital Imaging Technology is expected to generate 2.11 times more return on investment than Daishin Information. However, Digital Imaging is 2.11 times more volatile than Daishin Information Communications. It trades about 0.06 of its potential returns per unit of risk. Daishin Information Communications is currently generating about 0.01 per unit of risk. If you would invest  560,493  in Digital Imaging Technology on September 26, 2024 and sell it today you would earn a total of  729,507  from holding Digital Imaging Technology or generate 130.15% return on investment over 90 days.

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

Digital Imaging Technology  vs.  Daishin Information Communicat

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Daishin Information

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Daishin Information Communications are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daishin Information sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digital Imaging and Daishin Information

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

The idea behind Digital Imaging Technology and Daishin Information Communications 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.