Correlation Between Oracle and Digimarc
Can any of the company-specific risk be diversified away by investing in both Oracle and Digimarc 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 Oracle and Digimarc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Digimarc, you can compare the effects of market volatilities on Oracle and Digimarc 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 Oracle with a short position of Digimarc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Digimarc.
Diversification Opportunities for Oracle and Digimarc
Poor diversification
The 3 months correlation between Oracle and Digimarc is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc and Oracle 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 Oracle are associated (or correlated) with Digimarc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digimarc has no effect on the direction of Oracle i.e., Oracle and Digimarc go up and down completely randomly.
Pair Corralation between Oracle and Digimarc
Given the investment horizon of 90 days Oracle is expected to generate 0.66 times more return on investment than Digimarc. However, Oracle is 1.51 times less risky than Digimarc. It trades about 0.07 of its potential returns per unit of risk. Digimarc is currently generating about 0.03 per unit of risk. If you would invest 11,476 in Oracle on September 12, 2024 and sell it today you would earn a total of 6,298 from holding Oracle or generate 54.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oracle vs. Digimarc
Performance |
| Timeline |
| Oracle |
| Digimarc |
Oracle and Digimarc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Digimarc
The main advantage of trading using opposite Oracle and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Digimarc 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 Digimarc will offset losses from the drop in Digimarc's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Digimarc vs. The Hackett Group | Digimarc vs. Nayax | Digimarc vs. Formula Systems 1985 | Digimarc vs. Information Services Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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