Correlation Between 3D Systems and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both 3D Systems 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 3D Systems and Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3D Systems and Desktop Metal, you can compare the effects of market volatilities on 3D Systems 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 3D Systems with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3D Systems and Desktop Metal.
Diversification Opportunities for 3D Systems and Desktop Metal
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DDD and Desktop is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and 3D Systems 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 3D Systems 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 3D Systems i.e., 3D Systems and Desktop Metal go up and down completely randomly.
Pair Corralation between 3D Systems and Desktop Metal
Considering the 90-day investment horizon 3D Systems is expected to generate 1.5 times more return on investment than Desktop Metal. However, 3D Systems is 1.5 times more volatile than Desktop Metal. It trades about 0.28 of its potential returns per unit of risk. Desktop Metal is currently generating about 0.16 per unit of risk. If you would invest 308.00 in 3D Systems on November 18, 2024 and sell it today you would earn a total of 162.00 from holding 3D Systems or generate 52.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3D Systems vs. Desktop Metal
Performance |
| Timeline |
| 3D Systems |
| Desktop Metal |
3D Systems and Desktop Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3D Systems and Desktop Metal
The main advantage of trading using opposite 3D Systems and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3D Systems 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.| 3D Systems vs. Desktop Metal | 3D Systems vs. Nano Dimension | 3D Systems vs. Markforged Holding Corp | 3D Systems vs. Stratasys |
| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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