Correlation Between Desktop Metal and Ziff Davis
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and Ziff Davis 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 Ziff Davis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and Ziff Davis, you can compare the effects of market volatilities on Desktop Metal and Ziff Davis 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 Ziff Davis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Ziff Davis.
Diversification Opportunities for Desktop Metal and Ziff Davis
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Desktop and Ziff is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Ziff Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziff Davis 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 Ziff Davis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziff Davis has no effect on the direction of Desktop Metal i.e., Desktop Metal and Ziff Davis go up and down completely randomly.
Pair Corralation between Desktop Metal and Ziff Davis
Allowing for the 90-day total investment horizon Desktop Metal is expected to under-perform the Ziff Davis. In addition to that, Desktop Metal is 2.68 times more volatile than Ziff Davis. It trades about -0.02 of its total potential returns per unit of risk. Ziff Davis is currently generating about -0.03 per unit of volatility. If you would invest 8,591 in Ziff Davis on August 30, 2024 and sell it today you would lose (2,820) from holding Ziff Davis or give up 32.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. Ziff Davis
Performance |
| Timeline |
| Desktop Metal |
| Ziff Davis |
Desktop Metal and Ziff Davis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and Ziff Davis
The main advantage of trading using opposite Desktop Metal and Ziff Davis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, Ziff Davis 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 Ziff Davis will offset losses from the drop in Ziff Davis' long position.| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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