Correlation Between Digilife Technologies and TIMES CHINA

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

Diversification Opportunities for Digilife Technologies and TIMES CHINA

0.11

Correlation Coefficient

Digilife Technologies  TIMES CHINA

Average diversification

The 3 months correlation between Digilife and TIMES is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and TIMES CHINA go up and down completely randomly.

Pair Corralation between Digilife Technologies and TIMES CHINA

Assuming the 90 days trading horizon Digilife Technologies Limited is expected to generate 0.66 times more return on investment than TIMES CHINA. However, Digilife Technologies Limited is 1.52 times less risky than TIMES CHINA. It trades about 0.01 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.04 per unit of risk. If you would invest  76.00  in Digilife Technologies Limited on October 11, 2024 and sell it today you would lose (1.00) from holding Digilife Technologies Limited or give up 1.32% of portfolio value over 90 days.

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

Digilife Technologies Limited  vs.  TIMES CHINA HLDGS

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.

TIMES CHINA HLDGS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TIMES CHINA HLDGS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TIMES CHINA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digilife Technologies and TIMES CHINA

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

The idea behind Digilife Technologies Limited and TIMES CHINA HLDGS 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.