Correlation Between Deere and Liquidmetal Technologies
Can any of the company-specific risk be diversified away by investing in both Deere and Liquidmetal Technologies 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 Deere and Liquidmetal Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deere Company and Liquidmetal Technologies, you can compare the effects of market volatilities on Deere and Liquidmetal Technologies 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 Deere with a short position of Liquidmetal Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deere and Liquidmetal Technologies.
Diversification Opportunities for Deere and Liquidmetal Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deere and Liquidmetal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Deere Company and Liquidmetal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liquidmetal Technologies and Deere 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 Deere Company are associated (or correlated) with Liquidmetal Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liquidmetal Technologies has no effect on the direction of Deere i.e., Deere and Liquidmetal Technologies go up and down completely randomly.
Pair Corralation between Deere and Liquidmetal Technologies
If you would invest 38,174 in Deere Company on August 24, 2024 and sell it today you would earn a total of 5,580 from holding Deere Company or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Deere Company vs. Liquidmetal Technologies
Performance |
| Timeline |
| Deere Company |
| Liquidmetal Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Deere and Liquidmetal Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deere and Liquidmetal Technologies
The main advantage of trading using opposite Deere and Liquidmetal Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deere position performs unexpectedly, Liquidmetal Technologies 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 Liquidmetal Technologies will offset losses from the drop in Liquidmetal Technologies' long position.The idea behind Deere Company and Liquidmetal Technologies 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.| Liquidmetal Technologies vs. Insteel Industries | Liquidmetal Technologies vs. Carpenter Technology | Liquidmetal Technologies vs. Haynes International | Liquidmetal Technologies vs. Mueller Industries |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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