Correlation Between Digilife Technologies and GLOBUS MEDICAL-A

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

Diversification Opportunities for Digilife Technologies and GLOBUS MEDICAL-A

-0.4

Correlation Coefficient

Digilife Technologies  GLOBUS MEDICAL-A

Very good diversification

The 3 months correlation between Digilife and GLOBUS is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and GLOBUS MEDICAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBUS MEDICAL A 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 GLOBUS MEDICAL-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBUS MEDICAL A has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and GLOBUS MEDICAL-A go up and down completely randomly.

Pair Corralation between Digilife Technologies and GLOBUS MEDICAL-A

Assuming the 90 days trading horizon Digilife Technologies Limited is expected to under-perform the GLOBUS MEDICAL-A. In addition to that, Digilife Technologies is 2.18 times more volatile than GLOBUS MEDICAL A. It trades about -0.02 of its total potential returns per unit of risk. GLOBUS MEDICAL A is currently generating about 0.13 per unit of volatility. If you would invest  4,880  in GLOBUS MEDICAL A on October 9, 2024 and sell it today you would earn a total of  3,120  from holding GLOBUS MEDICAL A or generate 63.93% 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.  GLOBUS MEDICAL A

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

GLOBUS MEDICAL A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GLOBUS MEDICAL-A exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digilife Technologies and GLOBUS MEDICAL-A

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

The idea behind Digilife Technologies Limited and GLOBUS MEDICAL A 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.