Correlation Between Digimarc and BigBearai Holdings

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

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

Diversification Opportunities for Digimarc and BigBearai Holdings

-0.26

Correlation Coefficient

Digimarc  BigBearai Holdings

Very good diversification

The 3 months correlation between Digimarc and BigBearai is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and BigBearai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBearai Holdings and Digimarc 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 Digimarc are associated (or correlated) with BigBearai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBearai Holdings has no effect on the direction of Digimarc i.e., Digimarc and BigBearai Holdings go up and down completely randomly.

Pair Corralation between Digimarc and BigBearai Holdings

Given the investment horizon of 90 days Digimarc is expected to under-perform the BigBearai Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Digimarc is 1.79 times less risky than BigBearai Holdings. The stock trades about -0.14 of its potential returns per unit of risk. The BigBearai Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  220.00  in BigBearai Holdings on December 1, 2024 and sell it today you would earn a total of  296.00  from holding BigBearai Holdings or generate 134.55% return on investment over 90 days.

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

Digimarc  vs.  BigBearai Holdings

Digimarc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digimarc 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 rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

BigBearai Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digimarc and BigBearai Holdings

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

The idea behind Digimarc and BigBearai 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..