Correlation Between Digilife Technologies and SSP Group

Can any of the company-specific risk be diversified away by investing in both Digilife Technologies and SSP Group 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 SSP Group 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 SSP Group PLC, you can compare the effects of market volatilities on Digilife Technologies and SSP Group 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 SSP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and SSP Group.

Diversification Opportunities for Digilife Technologies and SSP Group

-0.32

Correlation Coefficient

Digilife Technologies  SSP Group

Very good diversification

The 3 months correlation between Digilife and SSP is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and SSP Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSP Group PLC 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 SSP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSP Group PLC has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and SSP Group go up and down completely randomly.

Pair Corralation between Digilife Technologies and SSP Group

Assuming the 90 days trading horizon Digilife Technologies Limited is expected to under-perform the SSP Group. In addition to that, Digilife Technologies is 1.64 times more volatile than SSP Group PLC. It trades about -0.08 of its total potential returns per unit of risk. SSP Group PLC is currently generating about 0.02 per unit of volatility. If you would invest  197.00  in SSP Group PLC on October 26, 2024 and sell it today you would earn a total of  1.00  from holding SSP Group PLC or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Digilife Technologies Limited  vs.  SSP Group PLC

Digilife Technologies

Risk-Adjusted Performance

0 of 100

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.

SSP Group PLC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SSP Group PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SSP Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Digilife Technologies and SSP Group

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

The idea behind Digilife Technologies Limited and SSP Group PLC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.