Correlation Between Digilife Technologies and Axcelis Technologies

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

Diversification Opportunities for Digilife Technologies and Axcelis Technologies

0.24

Correlation Coefficient

Digilife Technologies  Axcelis Technologies

Modest diversification

The 3 months correlation between Digilife and Axcelis is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Digilife Technologies Limited and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies 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 Axcelis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcelis Technologies has no effect on the direction of Digilife Technologies i.e., Digilife Technologies and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Digilife Technologies and Axcelis Technologies

Assuming the 90 days trading horizon Digilife Technologies Limited is expected to generate 1.51 times more return on investment than Axcelis Technologies. However, Digilife Technologies is 1.51 times more volatile than Axcelis Technologies. It trades about -0.02 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.14 per unit of risk. If you would invest  87.00  in Digilife Technologies Limited on September 3, 2024 and sell it today you would lose (9.00) from holding Digilife Technologies Limited or give up 10.34% of portfolio value over 90 days.

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

Digilife Technologies Limited  vs.  Axcelis Technologies

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.

Axcelis Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axcelis Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Digilife Technologies and Axcelis Technologies

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

The idea behind Digilife Technologies Limited and Axcelis Technologies 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..