Correlation Between Digimarc and International Business
Can any of the company-specific risk be diversified away by investing in both Digimarc and International Business 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 International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digimarc and International Business Machines, you can compare the effects of market volatilities on Digimarc and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and International Business.
Diversification Opportunities for Digimarc and International Business
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Digimarc and International is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Digimarc i.e., Digimarc and International Business go up and down completely randomly.
Pair Corralation between Digimarc and International Business
Given the investment horizon of 90 days Digimarc is expected to generate 1.23 times less return on investment than International Business. In addition to that, Digimarc is 3.29 times more volatile than International Business Machines. It trades about 0.1 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.4 per unit of volatility. If you would invest 20,471 in International Business Machines on September 4, 2024 and sell it today you would earn a total of 2,268 from holding International Business Machines or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digimarc vs. International Business Machine
Performance |
| Timeline |
| Digimarc |
| International Business |
Digimarc and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digimarc and International Business
The main advantage of trading using opposite Digimarc and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Digimarc vs. Innodata | Digimarc vs. International Business Machines | Digimarc vs. Aurora Innovation | Digimarc vs. BigBearai Holdings |
| International Business vs. EPAM Systems | International Business vs. Infosys Ltd ADR | International Business vs. Cognizant Technology Solutions | International Business vs. FiscalNote Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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