Correlation Between DigiCom Berhad and Lifevantage

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

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

Diversification Opportunities for DigiCom Berhad and Lifevantage

0.8

Correlation Coefficient

DigiCom Berhad  Lifevantage

Very poor diversification

The 3 months correlation between DigiCom and Lifevantage is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DigiCom Berhad and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and DigiCom Berhad 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 DigiCom Berhad are associated (or correlated) with Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of DigiCom Berhad i.e., DigiCom Berhad and Lifevantage go up and down completely randomly.

Pair Corralation between DigiCom Berhad and Lifevantage

If you would invest  1,528  in Lifevantage on October 3, 2024 and sell it today you would earn a total of  225.00  from holding Lifevantage or generate 14.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	4.55%
Values	Daily Returns

DigiCom Berhad  vs.  Lifevantage

DigiCom Berhad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DigiCom Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, DigiCom Berhad is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Lifevantage

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Lifevantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DigiCom Berhad and Lifevantage

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

The idea behind DigiCom Berhad and Lifevantage 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.