Correlation Between Digimarc and ProtoSource
Can any of the company-specific risk be diversified away by investing in both Digimarc and ProtoSource 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 ProtoSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digimarc and ProtoSource, you can compare the effects of market volatilities on Digimarc and ProtoSource 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 ProtoSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and ProtoSource.
Diversification Opportunities for Digimarc and ProtoSource
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Digimarc and ProtoSource is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and ProtoSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProtoSource 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 ProtoSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProtoSource has no effect on the direction of Digimarc i.e., Digimarc and ProtoSource go up and down completely randomly.
Pair Corralation between Digimarc and ProtoSource
If you would invest 3,128 in Digimarc on October 23, 2024 and sell it today you would earn a total of 1,054 from holding Digimarc or generate 33.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 1.64% |
Values | Daily Returns |
Digimarc vs. ProtoSource
Performance |
Timeline |
Digimarc |
ProtoSource |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Digimarc and ProtoSource Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Digimarc and ProtoSource
The main advantage of trading using opposite Digimarc and ProtoSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc position performs unexpectedly, ProtoSource 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 ProtoSource will offset losses from the drop in ProtoSource's long position.The idea behind Digimarc and ProtoSource 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.Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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