Correlation Between Digimarc and SCHLUMBERGER

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Can any of the company-specific risk be diversified away by investing in both Digimarc and SCHLUMBERGER 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 SCHLUMBERGER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digimarc and SCHLUMBERGER INVESTMENT SA, you can compare the effects of market volatilities on Digimarc and SCHLUMBERGER 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 SCHLUMBERGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and SCHLUMBERGER.

Diversification Opportunities for Digimarc and SCHLUMBERGER

-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Digimarc and SCHLUMBERGER is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and SCHLUMBERGER INVESTMENT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHLUMBERGER INVESTMENT 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 SCHLUMBERGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHLUMBERGER INVESTMENT has no effect on the direction of Digimarc i.e., Digimarc and SCHLUMBERGER go up and down completely randomly.

Pair Corralation between Digimarc and SCHLUMBERGER

Given the investment horizon of 90 days Digimarc is expected to generate 7.52 times more return on investment than SCHLUMBERGER. However, Digimarc is 7.52 times more volatile than SCHLUMBERGER INVESTMENT SA. It trades about 0.2 of its potential returns per unit of risk. SCHLUMBERGER INVESTMENT SA is currently generating about -0.38 per unit of risk. If you would invest  3,389  in Digimarc on September 30, 2024 and sell it today you would earn a total of  411.00  from holding Digimarc or generate 12.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Digimarc  vs.  SCHLUMBERGER INVESTMENT SA

 Performance 
       Timeline  
Digimarc 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Digimarc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Digimarc exhibited solid returns over the last few months and may actually be approaching a breakup point.
SCHLUMBERGER INVESTMENT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SCHLUMBERGER INVESTMENT SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SCHLUMBERGER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Digimarc and SCHLUMBERGER Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Digimarc and SCHLUMBERGER

The main advantage of trading using opposite Digimarc and SCHLUMBERGER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc position performs unexpectedly, SCHLUMBERGER 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 SCHLUMBERGER will offset losses from the drop in SCHLUMBERGER's long position.
The idea behind Digimarc and SCHLUMBERGER INVESTMENT SA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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