Correlation Between Desktop Metal and PAR Technology
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and PAR Technology 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 PAR Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and PAR Technology, you can compare the effects of market volatilities on Desktop Metal and PAR Technology 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 PAR Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and PAR Technology.
Diversification Opportunities for Desktop Metal and PAR Technology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Desktop and PAR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and PAR Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAR Technology 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 PAR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAR Technology has no effect on the direction of Desktop Metal i.e., Desktop Metal and PAR Technology go up and down completely randomly.
Pair Corralation between Desktop Metal and PAR Technology
Allowing for the 90-day total investment horizon Desktop Metal is expected to under-perform the PAR Technology. In addition to that, Desktop Metal is 2.08 times more volatile than PAR Technology. It trades about -0.05 of its total potential returns per unit of risk. PAR Technology is currently generating about 0.0 per unit of volatility. If you would invest 7,373 in PAR Technology on October 22, 2024 and sell it today you would lose (53.00) from holding PAR Technology or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Desktop Metal vs. PAR Technology
Performance |
| Timeline |
| Desktop Metal |
| PAR Technology |
Desktop Metal and PAR Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and PAR Technology
The main advantage of trading using opposite Desktop Metal and PAR Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, PAR Technology 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 PAR Technology will offset losses from the drop in PAR Technology's long position.| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
| PAR Technology vs. CS Disco LLC | PAR Technology vs. PROS Holdings | PAR Technology vs. Meridianlink | PAR Technology vs. Enfusion |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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