Correlation Between Digimarc and VNET Group
Can any of the company-specific risk be diversified away by investing in both Digimarc and VNET Group 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 VNET Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digimarc and VNET Group DRC, you can compare the effects of market volatilities on Digimarc and VNET Group 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 VNET Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and VNET Group.
Diversification Opportunities for Digimarc and VNET Group
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digimarc and VNET is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and VNET Group DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VNET Group DRC 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 VNET Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VNET Group DRC has no effect on the direction of Digimarc i.e., Digimarc and VNET Group go up and down completely randomly.
Pair Corralation between Digimarc and VNET Group
Given the investment horizon of 90 days Digimarc is expected to generate 0.53 times more return on investment than VNET Group. However, Digimarc is 1.87 times less risky than VNET Group. It trades about -0.41 of its potential returns per unit of risk. VNET Group DRC is currently generating about -0.44 per unit of risk. If you would invest 1,572 in Digimarc on January 5, 2025 and sell it today you would lose (415.00) from holding Digimarc or give up 26.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digimarc vs. VNET Group DRC
Performance |
| Timeline |
| Digimarc |
| VNET Group DRC |
Digimarc and VNET Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digimarc and VNET Group
The main advantage of trading using opposite Digimarc and VNET Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc position performs unexpectedly, VNET Group 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 VNET Group will offset losses from the drop in VNET Group's long position.The idea behind Digimarc and VNET Group DRC 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.| VNET Group vs. CLARIVATE PLC | ||
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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 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.
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