Correlation Between Desktop Metal and Data IO
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and Data IO 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 Data IO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and Data IO, you can compare the effects of market volatilities on Desktop Metal and Data IO 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 Data IO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Data IO.
Diversification Opportunities for Desktop Metal and Data IO
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Desktop and Data is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Data IO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data IO 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 Data IO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data IO has no effect on the direction of Desktop Metal i.e., Desktop Metal and Data IO go up and down completely randomly.
Pair Corralation between Desktop Metal and Data IO
Allowing for the 90-day total investment horizon Desktop Metal is expected to under-perform the Data IO. In addition to that, Desktop Metal is 2.59 times more volatile than Data IO. It trades about -0.05 of its total potential returns per unit of risk. Data IO is currently generating about 0.16 per unit of volatility. If you would invest 275.00 in Data IO on October 24, 2024 and sell it today you would earn a total of 18.00 from holding Data IO or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. Data IO
Performance |
| Timeline |
| Desktop Metal |
| Data IO |
Desktop Metal and Data IO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and Data IO
The main advantage of trading using opposite Desktop Metal and Data IO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, Data IO 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 Data IO will offset losses from the drop in Data IO's long position.| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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