Correlation Between Desktop Metal and SigmaTron International
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and SigmaTron International 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 SigmaTron International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and SigmaTron International, you can compare the effects of market volatilities on Desktop Metal and SigmaTron International 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 SigmaTron International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and SigmaTron International.
Diversification Opportunities for Desktop Metal and SigmaTron International
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Desktop and SigmaTron is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and SigmaTron International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SigmaTron International 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 SigmaTron International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SigmaTron International has no effect on the direction of Desktop Metal i.e., Desktop Metal and SigmaTron International go up and down completely randomly.
Pair Corralation between Desktop Metal and SigmaTron International
Allowing for the 90-day total investment horizon Desktop Metal is expected to generate 1.86 times more return on investment than SigmaTron International. However, Desktop Metal is 1.86 times more volatile than SigmaTron International. It trades about 0.02 of its potential returns per unit of risk. SigmaTron International is currently generating about -0.16 per unit of risk. If you would invest 232.00 in Desktop Metal on November 30, 2024 and sell it today you would lose (4.00) from holding Desktop Metal or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. SigmaTron International
Performance |
| Timeline |
| Desktop Metal |
| SigmaTron International |
Desktop Metal and SigmaTron International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and SigmaTron International
The main advantage of trading using opposite Desktop Metal and SigmaTron International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, SigmaTron International 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 SigmaTron International will offset losses from the drop in SigmaTron International's long position.| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
| SigmaTron International vs. Integrated Media Technology | SigmaTron International vs. Data IO | SigmaTron International vs. Research Frontiers Incorporated | SigmaTron International vs. Maris Tech |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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