Correlation Between Digimarc and Maverix Metals

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

By analyzing existing cross correlation between Digimarc and Maverix Metals, you can compare the effects of market volatilities on Digimarc and Maverix Metals 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 Maverix Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and Maverix Metals.

Diversification Opportunities for Digimarc and Maverix Metals

-0.74

Correlation Coefficient

Digimarc  Maverix Metals

Pay attention - limited upside

The 3 months correlation between Digimarc and Maverix is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and Maverix Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maverix Metals 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 Maverix Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maverix Metals has no effect on the direction of Digimarc i.e., Digimarc and Maverix Metals go up and down completely randomly.

Pair Corralation between Digimarc and Maverix Metals

If you would invest  3,534  in Digimarc on October 13, 2024 and sell it today you would earn a total of  695.00  from holding Digimarc or generate 19.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Digimarc  vs.  Maverix Metals

Digimarc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Digimarc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Digimarc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Maverix Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maverix Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Maverix Metals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Digimarc and Maverix Metals

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

The idea behind Digimarc and Maverix Metals 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.