Correlation Between Global X and Digimarc
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and Digimarc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Digimarc, you can compare the effects of market volatilities on Global X 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 Global X with a short position of Digimarc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Digimarc.
Diversification Opportunities for Global X and Digimarc
Very good diversification
The 3 months correlation between Global and Digimarc is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc and Global X 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 Global X Funds 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 Global X i.e., Global X and Digimarc go up and down completely randomly.
Pair Corralation between Global X and Digimarc
Considering the 90-day investment horizon Global X Funds is expected to generate 0.53 times more return on investment than Digimarc. However, Global X Funds is 1.9 times less risky than Digimarc. It trades about -0.08 of its potential returns per unit of risk. Digimarc is currently generating about -0.58 per unit of risk. If you would invest 2,600 in Global X Funds on January 26, 2024 and sell it today you would lose (40.00) from holding Global X Funds or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. Digimarc
Performance |
| Timeline |
| Global X Funds |
| Digimarc |
Global X and Digimarc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Digimarc
The main advantage of trading using opposite Global X and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.The idea behind Global X Funds and Digimarc 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.| Digimarc vs. Infosys Ltd ADR | Digimarc vs. Cognizant Technology Solutions | Digimarc vs. Fidelity National Information | Digimarc vs. Jack Henry Associates |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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