Correlation Between Digilife Technologies and WGHT WTCHER

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

Diversification Opportunities for Digilife Technologies and WGHT WTCHER

-0.18

Correlation Coefficient

Digilife Technologies  WGHT WTCHER

Good diversification

The 3 months correlation between Digilife and WGHT is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and WGHT WTCHER INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WGHT WTCHER INTL 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 WGHT WTCHER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WGHT WTCHER INTL has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and WGHT WTCHER go up and down completely randomly.

Pair Corralation between Digilife Technologies and WGHT WTCHER

Assuming the 90 days trading horizon Digilife Technologies is expected to generate 2.15 times less return on investment than WGHT WTCHER. But when comparing it to its historical volatility, Digilife Technologies Limited is 1.8 times less risky than WGHT WTCHER. It trades about 0.01 of its potential returns per unit of risk. WGHT WTCHER INTL is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  381.00  in WGHT WTCHER INTL on October 11, 2024 and sell it today you would lose (220.00) from holding WGHT WTCHER INTL or give up 57.74% of portfolio value over 90 days.

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

Digilife Technologies Limited  vs.  WGHT WTCHER INTL

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.

WGHT WTCHER INTL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WGHT WTCHER INTL are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, WGHT WTCHER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Digilife Technologies and WGHT WTCHER

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

The idea behind Digilife Technologies Limited and WGHT WTCHER INTL 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.