Correlation Between DiGiSPICE Technologies and BF Investment

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

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

Diversification Opportunities for DiGiSPICE Technologies and BF Investment

-0.47

Correlation Coefficient

DiGiSPICE Technologies  BF Investment

Very good diversification

The 3 months correlation between DiGiSPICE and BFINVEST is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding DiGiSPICE Technologies Limited and BF Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BF Investment Limited and DiGiSPICE Technologies 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 DiGiSPICE Technologies Limited are associated (or correlated) with BF Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BF Investment Limited has no effect on the direction of DiGiSPICE Technologies i.e., DiGiSPICE Technologies and BF Investment go up and down completely randomly.

Pair Corralation between DiGiSPICE Technologies and BF Investment

Assuming the 90 days trading horizon DiGiSPICE Technologies is expected to generate 1.09 times less return on investment than BF Investment. In addition to that, DiGiSPICE Technologies is 1.21 times more volatile than BF Investment Limited. It trades about 0.05 of its total potential returns per unit of risk. BF Investment Limited is currently generating about 0.07 per unit of volatility. If you would invest  38,090  in BF Investment Limited on October 4, 2024 and sell it today you would earn a total of  30,275  from holding BF Investment Limited or generate 79.48% return on investment over 90 days.

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

DiGiSPICE Technologies Limited  vs.  BF Investment Limited

DiGiSPICE Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DiGiSPICE Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, DiGiSPICE Technologies is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

BF Investment Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BF Investment Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, BF Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with DiGiSPICE Technologies and BF Investment

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

The idea behind DiGiSPICE Technologies Limited and BF Investment 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.