Correlation Between DigiMax Global and Axis Technologies

Can any of the company-specific risk be diversified away by investing in both DigiMax Global and Axis 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 DigiMax Global and Axis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DigiMax Global and Axis Technologies Group, you can compare the effects of market volatilities on DigiMax Global and Axis 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 DigiMax Global with a short position of Axis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigiMax Global and Axis Technologies.

Diversification Opportunities for DigiMax Global and Axis Technologies

-0.19

Correlation Coefficient

DigiMax Global  Axis Technologies

Good diversification

The 3 months correlation between DigiMax and Axis is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding DigiMax Global and Axis Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axis Technologies and DigiMax Global 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 DigiMax Global are associated (or correlated) with Axis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axis Technologies has no effect on the direction of DigiMax Global i.e., DigiMax Global and Axis Technologies go up and down completely randomly.

Pair Corralation between DigiMax Global and Axis Technologies

Assuming the 90 days horizon DigiMax Global is expected to generate 1.87 times less return on investment than Axis Technologies. But when comparing it to its historical volatility, DigiMax Global is 1.01 times less risky than Axis Technologies. It trades about 0.09 of its potential returns per unit of risk. Axis Technologies Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.14  in Axis Technologies Group on October 22, 2024 and sell it today you would lose (0.10) from holding Axis Technologies Group or give up 71.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

DigiMax Global  vs.  Axis Technologies Group

DigiMax Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DigiMax Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DigiMax Global reported solid returns over the last few months and may actually be approaching a breakup point.

Axis Technologies

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axis Technologies Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Axis Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DigiMax Global and Axis Technologies

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

The idea behind DigiMax Global and Axis Technologies Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.