Correlation Between Digimarc and Cantaloupe

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

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

Diversification Opportunities for Digimarc and Cantaloupe

0.74

Correlation Coefficient

Digimarc  Cantaloupe

Poor diversification

The 3 months correlation between Digimarc and Cantaloupe is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and Cantaloupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantaloupe 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 Cantaloupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantaloupe has no effect on the direction of Digimarc i.e., Digimarc and Cantaloupe go up and down completely randomly.

Pair Corralation between Digimarc and Cantaloupe

Given the investment horizon of 90 days Digimarc is expected to generate 1.44 times less return on investment than Cantaloupe. In addition to that, Digimarc is 1.31 times more volatile than Cantaloupe. It trades about 0.11 of its total potential returns per unit of risk. Cantaloupe is currently generating about 0.22 per unit of volatility. If you would invest  647.00  in Cantaloupe on August 31, 2024 and sell it today you would earn a total of  258.00  from holding Cantaloupe or generate 39.88% return on investment over 90 days.

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

Digimarc  vs.  Cantaloupe

Digimarc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Digimarc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Digimarc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cantaloupe

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cantaloupe are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady essential indicators, Cantaloupe reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digimarc and Cantaloupe

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

The idea behind Digimarc and Cantaloupe 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.