Correlation Between Belden and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both Belden and Desktop Metal 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 Belden and Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belden Inc and Desktop Metal, you can compare the effects of market volatilities on Belden and Desktop Metal 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 Belden with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and Desktop Metal.
Diversification Opportunities for Belden and Desktop Metal
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Belden and Desktop is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and Belden 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 Belden Inc are associated (or correlated) with Desktop Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desktop Metal has no effect on the direction of Belden i.e., Belden and Desktop Metal go up and down completely randomly.
Pair Corralation between Belden and Desktop Metal
Considering the 90-day investment horizon Belden Inc is expected to generate 0.45 times more return on investment than Desktop Metal. However, Belden Inc is 2.24 times less risky than Desktop Metal. It trades about 0.04 of its potential returns per unit of risk. Desktop Metal is currently generating about -0.06 per unit of risk. If you would invest 9,421 in Belden Inc on September 2, 2024 and sell it today you would earn a total of 2,819 from holding Belden Inc or generate 29.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belden Inc vs. Desktop Metal
Performance |
| Timeline |
| Belden Inc |
| Desktop Metal |
Belden and Desktop Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belden and Desktop Metal
The main advantage of trading using opposite Belden and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belden position performs unexpectedly, Desktop Metal 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 Desktop Metal will offset losses from the drop in Desktop Metal's long position.| Belden vs. Clearfield | Belden vs. Comtech Telecommunications Corp | Belden vs. Knowles Cor | Belden vs. Extreme Networks |
| Desktop Metal vs. Knowles Cor | Desktop Metal vs. Ubiquiti Networks | Desktop Metal vs. AmpliTech Group | Desktop Metal vs. Viavi Solutions |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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