Correlation Between Desktop Metal and Socket Mobile
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and Socket Mobile 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 Socket Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and Socket Mobile, you can compare the effects of market volatilities on Desktop Metal and Socket Mobile 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 Socket Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Socket Mobile.
Diversification Opportunities for Desktop Metal and Socket Mobile
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Desktop and Socket is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Socket Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socket Mobile 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 Socket Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socket Mobile has no effect on the direction of Desktop Metal i.e., Desktop Metal and Socket Mobile go up and down completely randomly.
Pair Corralation between Desktop Metal and Socket Mobile
Allowing for the 90-day total investment horizon Desktop Metal is expected to generate 1.71 times more return on investment than Socket Mobile. However, Desktop Metal is 1.71 times more volatile than Socket Mobile. It trades about -0.01 of its potential returns per unit of risk. Socket Mobile is currently generating about -0.07 per unit of risk. If you would invest 271.00 in Desktop Metal on November 9, 2024 and sell it today you would lose (14.00) from holding Desktop Metal or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. Socket Mobile
Performance |
| Timeline |
| Desktop Metal |
| Socket Mobile |
Desktop Metal and Socket Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and Socket Mobile
The main advantage of trading using opposite Desktop Metal and Socket Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, Socket Mobile 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 Socket Mobile will offset losses from the drop in Socket Mobile's long position.| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
| Socket Mobile vs. Cricut Inc | Socket Mobile vs. Nano Dimension | Socket Mobile vs. IONQ Inc | Socket Mobile vs. AGM Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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