Correlation Between Donaldson and Xometry

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Can any of the company-specific risk be diversified away by investing in both Donaldson and Xometry 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 Donaldson and Xometry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Donaldson and Xometry, you can compare the effects of market volatilities on Donaldson and Xometry 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 Donaldson with a short position of Xometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donaldson and Xometry.

Diversification Opportunities for Donaldson and Xometry

DonaldsonXometryDiversified AwayDonaldsonXometryDiversified Away100%
-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Donaldson and Xometry is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Donaldson and Xometry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xometry and Donaldson 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 Donaldson are associated (or correlated) with Xometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xometry has no effect on the direction of Donaldson i.e., Donaldson and Xometry go up and down completely randomly.

Pair Corralation between Donaldson and Xometry

Considering the 90-day investment horizon Donaldson is expected to under-perform the Xometry. But the stock apears to be less risky and, when comparing its historical volatility, Donaldson is 3.94 times less risky than Xometry. The stock trades about -0.2 of its potential returns per unit of risk. The Xometry is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,266  in Xometry on November 25, 2024 and sell it today you would lose (39.00) from holding Xometry or give up 1.19% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Donaldson  vs.  Xometry

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020304050
JavaScript chart by amCharts 3.21.15DCI XMTR
       Timeline  
Donaldson 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Donaldson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66687072747678
Xometry 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Xometry are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Xometry is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3234363840424446

Donaldson and Xometry Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.29-1.75-1.21-0.67-0.130.360.91.441.982.52 0.050.100.150.20
JavaScript chart by amCharts 3.21.15DCI XMTR
       Returns  

Pair Trading with Donaldson and Xometry

The main advantage of trading using opposite Donaldson and Xometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donaldson position performs unexpectedly, Xometry 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 Xometry will offset losses from the drop in Xometry's long position.
The idea behind Donaldson and Xometry 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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