Correlation Between Desktop Metal and Tungray Technologies
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and Tungray Technologies 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 Tungray Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and Tungray Technologies Class, you can compare the effects of market volatilities on Desktop Metal and Tungray Technologies 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 Tungray Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Tungray Technologies.
Diversification Opportunities for Desktop Metal and Tungray Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Desktop and Tungray is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Tungray Technologies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tungray Technologies 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 Tungray Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tungray Technologies has no effect on the direction of Desktop Metal i.e., Desktop Metal and Tungray Technologies go up and down completely randomly.
Pair Corralation between Desktop Metal and Tungray Technologies
Allowing for the 90-day total investment horizon Desktop Metal is expected to under-perform the Tungray Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Desktop Metal is 1.9 times less risky than Tungray Technologies. The stock trades about -0.14 of its potential returns per unit of risk. The Tungray Technologies Class is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 240.00 in Tungray Technologies Class on September 5, 2024 and sell it today you would earn a total of 55.00 from holding Tungray Technologies Class or generate 22.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. Tungray Technologies Class
Performance |
| Timeline |
| Desktop Metal |
| Tungray Technologies |
Desktop Metal and Tungray Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and Tungray Technologies
The main advantage of trading using opposite Desktop Metal and Tungray Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, Tungray Technologies 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 Tungray Technologies will offset losses from the drop in Tungray Technologies' long position.| Desktop Metal vs. Fabrinet | Desktop Metal vs. Kimball Electronics | Desktop Metal vs. Knowles Cor | Desktop Metal vs. Ubiquiti Networks |
| Tungray Technologies vs. Fabrinet | Tungray Technologies vs. Kimball Electronics | Tungray Technologies vs. Knowles Cor | Tungray Technologies vs. Ubiquiti Networks |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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