Correlation Between Trump Media and 3M
Can any of the company-specific risk be diversified away by investing in both Trump Media and 3M 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 Trump Media and 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trump Media Technology and 3M Company, you can compare the effects of market volatilities on Trump Media and 3M 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 Trump Media with a short position of 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trump Media and 3M.
Diversification Opportunities for Trump Media and 3M
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Trump and 3M is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Trump Media Technology and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company and Trump Media 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 Trump Media Technology are associated (or correlated) with 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Trump Media i.e., Trump Media and 3M go up and down completely randomly.
Pair Corralation between Trump Media and 3M
Considering the 90-day investment horizon Trump Media Technology is expected to under-perform the 3M. In addition to that, Trump Media is 4.14 times more volatile than 3M Company. It trades about 0.0 of its total potential returns per unit of risk. 3M Company is currently generating about 0.29 per unit of volatility. If you would invest 13,115 in 3M Company on November 3, 2024 and sell it today you would earn a total of 2,105 from holding 3M Company or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Trump Media Technology vs. 3M Company
Performance |
| Timeline |
| Trump Media Technology |
| 3M Company |
Trump Media and 3M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trump Media and 3M
The main advantage of trading using opposite Trump Media and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trump Media position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.| Trump Media vs. Biglari Holdings | Trump Media vs. DHI Group | Trump Media vs. Golden Energy Offshore | Trump Media vs. One Group Hospitality |
| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
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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