Correlation Between CNVISION MEDIA and Digilife Technologies

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Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA 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 CNVISION MEDIA and Digilife Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and Digilife Technologies Limited, you can compare the effects of market volatilities on CNVISION MEDIA 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 CNVISION MEDIA with a short position of Digilife Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and Digilife Technologies.

Diversification Opportunities for CNVISION MEDIA and Digilife Technologies

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between CNVISION and Digilife is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and Digilife Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digilife Technologies and CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA i.e., CNVISION MEDIA and Digilife Technologies go up and down completely randomly.

Pair Corralation between CNVISION MEDIA and Digilife Technologies

Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 0.97 times more return on investment than Digilife Technologies. However, CNVISION MEDIA is 1.03 times less risky than Digilife Technologies. It trades about 0.12 of its potential returns per unit of risk. Digilife Technologies Limited is currently generating about -0.03 per unit of risk. If you would invest  3.90  in CNVISION MEDIA on September 5, 2024 and sell it today you would earn a total of  1.05  from holding CNVISION MEDIA or generate 26.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CNVISION MEDIA  vs.  Digilife Technologies Limited

 Performance 
       Timeline  
CNVISION MEDIA 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CNVISION MEDIA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, CNVISION MEDIA exhibited solid returns over the last few months and may actually be approaching a breakup point.
Digilife Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Digilife Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CNVISION MEDIA and Digilife Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CNVISION MEDIA and Digilife Technologies

The main advantage of trading using opposite CNVISION MEDIA and Digilife Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA 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.
The idea behind CNVISION MEDIA and Digilife Technologies Limited 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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