Correlation Between Desktop Metal and Seagate Technology
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and Seagate 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 Seagate 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 Seagate Technology PLC, you can compare the effects of market volatilities on Desktop Metal and Seagate 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 Seagate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Seagate Technology.
Diversification Opportunities for Desktop Metal and Seagate Technology
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Desktop and Seagate is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Seagate Technology PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagate Technology PLC 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 Seagate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seagate Technology PLC has no effect on the direction of Desktop Metal i.e., Desktop Metal and Seagate Technology go up and down completely randomly.
Pair Corralation between Desktop Metal and Seagate Technology
Allowing for the 90-day total investment horizon Desktop Metal is expected to generate 2.31 times more return on investment than Seagate Technology. However, Desktop Metal is 2.31 times more volatile than Seagate Technology PLC. It trades about 0.16 of its potential returns per unit of risk. Seagate Technology PLC is currently generating about 0.09 per unit of risk. If you would invest 219.00 in Desktop Metal on November 18, 2024 and sell it today you would earn a total of 37.00 from holding Desktop Metal or generate 16.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. Seagate Technology PLC
Performance |
| Timeline |
| Desktop Metal |
| Seagate Technology PLC |
Desktop Metal and Seagate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and Seagate Technology
The main advantage of trading using opposite Desktop Metal and Seagate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, Seagate 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 Seagate Technology will offset losses from the drop in Seagate Technology's long position.| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
| Seagate Technology vs. NetApp Inc | Seagate Technology vs. Dell Technologies | Seagate Technology vs. Pure Storage | Seagate Technology vs. HP Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |