Correlation Between Computer Task and Digimarc
Can any of the company-specific risk be diversified away by investing in both Computer Task 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 Computer Task and Digimarc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Task Group and Digimarc, you can compare the effects of market volatilities on Computer Task 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 Computer Task with a short position of Digimarc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Task and Digimarc.
Diversification Opportunities for Computer Task and Digimarc
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Computer and Digimarc is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Computer Task Group and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc and Computer Task 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 Computer Task Group 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 Computer Task i.e., Computer Task and Digimarc go up and down completely randomly.
Pair Corralation between Computer Task and Digimarc
Considering the 90-day investment horizon Computer Task is expected to generate 2.16 times less return on investment than Digimarc. But when comparing it to its historical volatility, Computer Task Group is 1.81 times less risky than Digimarc. It trades about 0.02 of its potential returns per unit of risk. Digimarc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,742 in Digimarc on December 29, 2023 and sell it today you would lose (40.00) from holding Digimarc or give up 1.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 85.83% |
Values | Daily Returns |
Computer Task Group vs. Digimarc
Performance |
Timeline |
Computer Task Group |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Digimarc |
Computer Task and Digimarc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Computer Task and Digimarc
The main advantage of trading using opposite Computer Task and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Task 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.Computer Task vs. BCE Inc | Computer Task vs. Youdao Inc | Computer Task vs. Relx PLC ADR | Computer Task vs. Skillful Craftsman Education |
Digimarc vs. Genpact Limited | Digimarc vs. Fiserv Inc | Digimarc vs. Gartner | Digimarc vs. Kyndryl 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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