Correlation Between Desktop Metal and ClearOne
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and ClearOne 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 Desktop Metal and ClearOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and ClearOne, you can compare the effects of market volatilities on Desktop Metal and ClearOne 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 Desktop Metal with a short position of ClearOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and ClearOne.
Diversification Opportunities for Desktop Metal and ClearOne
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Desktop and ClearOne is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and ClearOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearOne and Desktop Metal 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 Desktop Metal are associated (or correlated) with ClearOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearOne has no effect on the direction of Desktop Metal i.e., Desktop Metal and ClearOne go up and down completely randomly.
Pair Corralation between Desktop Metal and ClearOne
Allowing for the 90-day total investment horizon Desktop Metal is expected to under-perform the ClearOne. In addition to that, Desktop Metal is 1.45 times more volatile than ClearOne. It trades about -0.14 of its total potential returns per unit of risk. ClearOne is currently generating about -0.14 per unit of volatility. If you would invest 57.00 in ClearOne on September 2, 2024 and sell it today you would lose (6.00) from holding ClearOne or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. ClearOne
Performance |
| Timeline |
| Desktop Metal |
| ClearOne |
Desktop Metal and ClearOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and ClearOne
The main advantage of trading using opposite Desktop Metal and ClearOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, ClearOne 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 ClearOne will offset losses from the drop in ClearOne's long position.| Desktop Metal vs. Knowles Cor | Desktop Metal vs. Ubiquiti Networks | Desktop Metal vs. AmpliTech Group | Desktop Metal vs. Viavi Solutions |
| ClearOne vs. Comtech Telecommunications Corp | ClearOne vs. KVH Industries | ClearOne vs. Silicom | ClearOne vs. Knowles Cor |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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