Correlation Between Digilife Technologies and Genertec Universal

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

Diversification Opportunities for Digilife Technologies and Genertec Universal

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Digilife and Genertec is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and Genertec Universal Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genertec Universal and Digilife 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 Digilife Technologies Limited are associated (or correlated) with Genertec Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genertec Universal has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and Genertec Universal go up and down completely randomly.

Pair Corralation between Digilife Technologies and Genertec Universal

Assuming the 90 days trading horizon Digilife Technologies Limited is expected to under-perform the Genertec Universal. In addition to that, Digilife Technologies is 1.54 times more volatile than Genertec Universal Medical. It trades about -0.06 of its total potential returns per unit of risk. Genertec Universal Medical is currently generating about 0.07 per unit of volatility. If you would invest  53.00  in Genertec Universal Medical on October 24, 2024 and sell it today you would earn a total of  5.00  from holding Genertec Universal Medical or generate 9.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Digilife Technologies Limited  vs.  Genertec Universal Medical

 Performance 
       Timeline  
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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Genertec Universal 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Genertec Universal Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Genertec Universal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Digilife Technologies and Genertec Universal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Digilife Technologies and Genertec Universal

The main advantage of trading using opposite Digilife Technologies and Genertec Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife Technologies position performs unexpectedly, Genertec Universal 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 Genertec Universal will offset losses from the drop in Genertec Universal's long position.
The idea behind Digilife Technologies Limited and Genertec Universal Medical 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 Stocks Directory module to find actively traded stocks across global markets.

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