Correlation Between Eltek and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both Eltek and Desktop Metal 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 Eltek and Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eltek and Desktop Metal, you can compare the effects of market volatilities on Eltek and Desktop Metal 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 Eltek with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eltek and Desktop Metal.
Diversification Opportunities for Eltek and Desktop Metal
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eltek and Desktop is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and Eltek 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 Eltek are associated (or correlated) with Desktop Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desktop Metal has no effect on the direction of Eltek i.e., Eltek and Desktop Metal go up and down completely randomly.
Pair Corralation between Eltek and Desktop Metal
Given the investment horizon of 90 days Eltek is expected to generate 0.49 times more return on investment than Desktop Metal. However, Eltek is 2.03 times less risky than Desktop Metal. It trades about 0.03 of its potential returns per unit of risk. Desktop Metal is currently generating about -0.06 per unit of risk. If you would invest 1,029 in Eltek on September 3, 2024 and sell it today you would earn a total of 75.00 from holding Eltek or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eltek vs. Desktop Metal
Performance |
| Timeline |
| Eltek |
| Desktop Metal |
Eltek and Desktop Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eltek and Desktop Metal
The main advantage of trading using opposite Eltek and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eltek position performs unexpectedly, Desktop Metal 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 Desktop Metal will offset losses from the drop in Desktop Metal's long position.| Eltek vs. Methode Electronics | Eltek vs. OSI Systems | Eltek vs. Bel Fuse A | Eltek vs. Richardson Electronics |
| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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