Correlation Between Lantronix and Digimarc

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

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

Diversification Opportunities for Lantronix and Digimarc

0.12

Correlation Coefficient

Lantronix  Digimarc

Average diversification

The 3 months correlation between Lantronix and Digimarc is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lantronix and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc and Lantronix 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 Lantronix 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 Lantronix i.e., Lantronix and Digimarc go up and down completely randomly.

Pair Corralation between Lantronix and Digimarc

Given the investment horizon of 90 days Lantronix is expected to generate 1.43 times more return on investment than Digimarc. However, Lantronix is 1.43 times more volatile than Digimarc. It trades about 0.18 of its potential returns per unit of risk. Digimarc is currently generating about 0.0 per unit of risk. If you would invest  289.00  in Lantronix on August 15, 2025 and sell it today you would earn a total of  218.00  from holding Lantronix or generate 75.43% return on investment over 90 days.

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

Lantronix  vs.  Digimarc

Lantronix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lantronix are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Lantronix showed solid returns over the last few months and may actually be approaching a breakup point.

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 rather sound basic indicators, Digimarc is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lantronix and Digimarc

The main advantage of trading using opposite Lantronix and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantronix 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 Lantronix 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.