Correlation Between CSP and Digimarc
Can any of the company-specific risk be diversified away by investing in both CSP 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 CSP and Digimarc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSP Inc and Digimarc, you can compare the effects of market volatilities on CSP 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 CSP with a short position of Digimarc. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSP and Digimarc.
Diversification Opportunities for CSP and Digimarc
Very good diversification
The 3 months correlation between CSP and Digimarc is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc and CSP 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 CSP Inc 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 CSP i.e., CSP and Digimarc go up and down completely randomly.
Pair Corralation between CSP and Digimarc
Given the investment horizon of 90 days CSP Inc is expected to under-perform the Digimarc. In addition to that, CSP is 2.97 times more volatile than Digimarc. It trades about -0.34 of its total potential returns per unit of risk. Digimarc is currently generating about -0.53 per unit of volatility. If you would invest 2,857 in Digimarc on January 20, 2024 and sell it today you would lose (558.00) from holding Digimarc or give up 19.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CSP Inc vs. Digimarc
Performance |
| Timeline |
| CSP Inc |
| Digimarc |
CSP and Digimarc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSP and Digimarc
The main advantage of trading using opposite CSP and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSP 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.| CSP vs. Information Services Group | CSP vs. Home Bancorp | CSP vs. CRA International | CSP vs. Aquagold International |
| Digimarc vs. CLPS Inc | Digimarc vs. Formula Systems 1985 | Digimarc vs. CSP Inc | Digimarc vs. Information Services Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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