Correlation Between DigiAsia Corp and Infrared Cameras

Can any of the company-specific risk be diversified away by investing in both DigiAsia Corp and Infrared Cameras 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 DigiAsia Corp and Infrared Cameras into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DigiAsia Corp and Infrared Cameras Holdings, you can compare the effects of market volatilities on DigiAsia Corp and Infrared Cameras 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 DigiAsia Corp with a short position of Infrared Cameras. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigiAsia Corp and Infrared Cameras.

Diversification Opportunities for DigiAsia Corp and Infrared Cameras

0.81

Correlation Coefficient

DigiAsia Corp  Infrared Cameras

Very poor diversification

The 3 months correlation between DigiAsia and Infrared is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding DigiAsia Corp and Infrared Cameras Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrared Cameras Holdings and DigiAsia Corp 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 DigiAsia Corp are associated (or correlated) with Infrared Cameras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrared Cameras Holdings has no effect on the direction of DigiAsia Corp i.e., DigiAsia Corp and Infrared Cameras go up and down completely randomly.

Pair Corralation between DigiAsia Corp and Infrared Cameras

Given the investment horizon of 90 days DigiAsia Corp is expected to generate 2.25 times more return on investment than Infrared Cameras. However, DigiAsia Corp is 2.25 times more volatile than Infrared Cameras Holdings. It trades about -0.02 of its potential returns per unit of risk. Infrared Cameras Holdings is currently generating about -0.13 per unit of risk. If you would invest  46.00  in DigiAsia Corp on February 3, 2025 and sell it today you would lose (19.00) from holding DigiAsia Corp or give up 41.3% of portfolio value over 90 days.

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

DigiAsia Corp  vs.  Infrared Cameras Holdings

DigiAsia Corp

Risk-Adjusted Performance

Very Weak

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

Infrared Cameras Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infrared Cameras Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with DigiAsia Corp and Infrared Cameras

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

The idea behind DigiAsia Corp and Infrared Cameras Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.