Correlation Between Digilife Technologies and GOLD ROAD

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

Diversification Opportunities for Digilife Technologies and GOLD ROAD

-0.82

Correlation Coefficient

Digilife Technologies  GOLD ROAD

Pay attention - limited upside

The 3 months correlation between Digilife and GOLD is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and GOLD ROAD go up and down completely randomly.

Pair Corralation between Digilife Technologies and GOLD ROAD

Assuming the 90 days trading horizon Digilife Technologies Limited is expected to under-perform the GOLD ROAD. In addition to that, Digilife Technologies is 1.69 times more volatile than GOLD ROAD RES. It trades about -0.08 of its total potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.2 per unit of volatility. If you would invest  113.00  in GOLD ROAD RES on October 26, 2024 and sell it today you would earn a total of  34.00  from holding GOLD ROAD RES or generate 30.09% return on investment over 90 days.

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

Digilife Technologies Limited  vs.  GOLD ROAD RES

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.

GOLD ROAD RES

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, GOLD ROAD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digilife Technologies and GOLD ROAD

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

The idea behind Digilife Technologies Limited and GOLD ROAD RES 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.