Correlation Between Digimarc and Verb Technology

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

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

Diversification Opportunities for Digimarc and Verb Technology

0.56

Correlation Coefficient

Digimarc  Verb Technology

Very weak diversification

The 3 months correlation between Digimarc and Verb is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and Verb Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verb Technology 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 Verb Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verb Technology has no effect on the direction of Digimarc i.e., Digimarc and Verb Technology go up and down completely randomly.

Pair Corralation between Digimarc and Verb Technology

Given the investment horizon of 90 days Digimarc is expected to generate 6.2 times less return on investment than Verb Technology. But when comparing it to its historical volatility, Digimarc is 2.01 times less risky than Verb Technology. It trades about 0.07 of its potential returns per unit of risk. Verb Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  420.00  in Verb Technology on April 17, 2025 and sell it today you would earn a total of  453.00  from holding Verb Technology or generate 107.86% return on investment over 90 days.

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

Digimarc  vs.  Verb Technology

Digimarc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Digimarc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Digimarc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Verb Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Verb Technology are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Verb Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digimarc and Verb Technology

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

The idea behind Digimarc and Verb Technology 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.