Correlation Between Desktop Metal and Trimble
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and Trimble 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 Trimble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and Trimble, you can compare the effects of market volatilities on Desktop Metal and Trimble 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 Trimble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Trimble.
Diversification Opportunities for Desktop Metal and Trimble
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Desktop and Trimble is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble 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 Trimble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimble has no effect on the direction of Desktop Metal i.e., Desktop Metal and Trimble go up and down completely randomly.
Pair Corralation between Desktop Metal and Trimble
Allowing for the 90-day total investment horizon Desktop Metal is expected to under-perform the Trimble. In addition to that, Desktop Metal is 4.72 times more volatile than Trimble. It trades about -0.1 of its total potential returns per unit of risk. Trimble is currently generating about 0.3 per unit of volatility. If you would invest 6,971 in Trimble on November 2, 2024 and sell it today you would earn a total of 557.50 from holding Trimble or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. Trimble
Performance |
| Timeline |
| Desktop Metal |
| Trimble |
Desktop Metal and Trimble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and Trimble
The main advantage of trading using opposite Desktop Metal and Trimble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, Trimble 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 Trimble will offset losses from the drop in Trimble's long position.| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
| Trimble vs. Fortive Corp | Trimble vs. MKS Instruments | Trimble vs. Novanta | Trimble vs. Vishay Precision Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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