Correlation Between Digilife Technologies and Amkor Technology

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

Diversification Opportunities for Digilife Technologies and Amkor Technology

0.17

Correlation Coefficient

Digilife Technologies  Amkor Technology

Average diversification

The 3 months correlation between Digilife and Amkor is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology 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 Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and Amkor Technology go up and down completely randomly.

Pair Corralation between Digilife Technologies and Amkor Technology

Assuming the 90 days trading horizon Digilife Technologies Limited is expected to generate 2.21 times more return on investment than Amkor Technology. However, Digilife Technologies is 2.21 times more volatile than Amkor Technology. It trades about 0.04 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.02 per unit of risk. If you would invest  77.00  in Digilife Technologies Limited on September 1, 2024 and sell it today you would earn a total of  1.00  from holding Digilife Technologies Limited or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Digilife Technologies Limited  vs.  Amkor Technology

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 nearly stable basic indicators, Digilife Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Amkor Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amkor Technology 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 December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Digilife Technologies and Amkor Technology

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

The idea behind Digilife Technologies Limited and Amkor Technology 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.