Correlation Between Digimarc and Perfect Corp

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

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

Diversification Opportunities for Digimarc and Perfect Corp

0.71

Correlation Coefficient

Digimarc  Perfect Corp

Poor diversification

The 3 months correlation between Digimarc and Perfect is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and Perfect Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perfect Corp 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 Perfect Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perfect Corp has no effect on the direction of Digimarc i.e., Digimarc and Perfect Corp go up and down completely randomly.

Pair Corralation between Digimarc and Perfect Corp

Given the investment horizon of 90 days Digimarc is expected to generate 1.41 times more return on investment than Perfect Corp. However, Digimarc is 1.41 times more volatile than Perfect Corp. It trades about -0.03 of its potential returns per unit of risk. Perfect Corp is currently generating about -0.05 per unit of risk. If you would invest  996.00  in Digimarc on September 14, 2025 and sell it today you would lose (127.00) from holding Digimarc or give up 12.75% of portfolio value over 90 days.

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

Digimarc  vs.  Perfect Corp

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Perfect Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Perfect Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Digimarc and Perfect Corp

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

The idea behind Digimarc and Perfect Corp 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.