Correlation Between Digilife Technologies and Asahi Group
Can any of the company-specific risk be diversified away by investing in both Digilife Technologies and Asahi 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 Asahi 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 Asahi Group Holdings, you can compare the effects of market volatilities on Digilife Technologies and Asahi 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 Asahi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digilife Technologies and Asahi Group.
Diversification Opportunities for Digilife Technologies and Asahi Group
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digilife and Asahi is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and Asahi Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Group Holdings 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 Asahi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Group Holdings has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and Asahi Group go up and down completely randomly.
Pair Corralation between Digilife Technologies and Asahi Group
Assuming the 90 days trading horizon Digilife Technologies Limited is expected to under-perform the Asahi Group. In addition to that, Digilife Technologies is 1.54 times more volatile than Asahi Group Holdings. It trades about -0.03 of its total potential returns per unit of risk. Asahi Group Holdings is currently generating about 0.27 per unit of volatility. If you would invest 1,056 in Asahi Group Holdings on December 2, 2024 and sell it today you would earn a total of 138.00 from holding Asahi Group Holdings or generate 13.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Digilife Technologies Limited vs. Asahi Group Holdings
Performance |
Timeline |
Digilife Technologies |
Asahi Group Holdings |
Digilife Technologies and Asahi Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Digilife Technologies and Asahi Group
The main advantage of trading using opposite Digilife Technologies and Asahi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digilife Technologies position performs unexpectedly, Asahi 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 Asahi Group will offset losses from the drop in Asahi Group's long position.Digilife Technologies vs. Aegean Airlines SA | Digilife Technologies vs. Axfood AB | Digilife Technologies vs. JAPAN AIRLINES | Digilife Technologies vs. China Resources Beer |
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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.
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