Correlation Between Digimarc and 3 E

Can any of the company-specific risk be diversified away by investing in both Digimarc and 3 E 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 3 E into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Digimarc and 3 E Network, you can compare the effects of market volatilities on Digimarc and 3 E 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 3 E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and 3 E.

Diversification Opportunities for Digimarc and 3 E

0.6

Correlation Coefficient

Digimarc  3 E

Poor diversification

The 3 months correlation between Digimarc and MASK is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and 3 E Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3 E Network 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 3 E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3 E Network has no effect on the direction of Digimarc i.e., Digimarc and 3 E go up and down completely randomly.

Pair Corralation between Digimarc and 3 E

Given the investment horizon of 90 days Digimarc is expected to generate 0.65 times more return on investment than 3 E. However, Digimarc is 1.53 times less risky than 3 E. It trades about -0.13 of its potential returns per unit of risk. 3 E Network is currently generating about -0.38 per unit of risk. If you would invest  1,288  in Digimarc on May 26, 2025 and sell it today you would lose (407.00) from holding Digimarc or give up 31.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Digimarc  vs.  3 E Network

Digimarc

Risk-Adjusted Performance

Weakest

Over the last 90 days Digimarc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

3 E Network

Risk-Adjusted Performance

Weakest

Over the last 90 days 3 E Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Digimarc and 3 E

The main advantage of trading using opposite Digimarc and 3 E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc position performs unexpectedly, 3 E 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 3 E will offset losses from the drop in 3 E's long position.

The idea behind Digimarc and 3 E Network 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.