Correlation Between Desktop Metal and Stratasys
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and Stratasys 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 Stratasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and Stratasys, you can compare the effects of market volatilities on Desktop Metal and Stratasys 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 Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Stratasys.
Diversification Opportunities for Desktop Metal and Stratasys
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Desktop and Stratasys is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of Desktop Metal i.e., Desktop Metal and Stratasys go up and down completely randomly.
Pair Corralation between Desktop Metal and Stratasys
Allowing for the 90-day total investment horizon Desktop Metal is expected to generate 1.85 times more return on investment than Stratasys. However, Desktop Metal is 1.85 times more volatile than Stratasys. It trades about 0.0 of its potential returns per unit of risk. Stratasys is currently generating about -0.01 per unit of risk. If you would invest 750.00 in Desktop Metal on August 27, 2024 and sell it today you would lose (308.00) from holding Desktop Metal or give up 41.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. Stratasys
Performance |
| Timeline |
| Desktop Metal |
| Stratasys |
Desktop Metal and Stratasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and Stratasys
The main advantage of trading using opposite Desktop Metal and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.| Desktop Metal vs. Plexus Corp | Desktop Metal vs. Benchmark Electronics | Desktop Metal vs. Jabil Circuit | Desktop Metal vs. Sanmina |
| Stratasys vs. Nano Dimension | Stratasys vs. IONQ Inc | Stratasys vs. D Wave Quantum | Stratasys vs. Desktop Metal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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