Correlation Between HP and Markforged Holding
Can any of the company-specific risk be diversified away by investing in both HP and Markforged Holding 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 HP and Markforged Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Markforged Holding Corp, you can compare the effects of market volatilities on HP and Markforged Holding 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 HP with a short position of Markforged Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Markforged Holding.
Diversification Opportunities for HP and Markforged Holding
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HP and Markforged is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Markforged Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markforged Holding Corp and HP 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 HP Inc are associated (or correlated) with Markforged Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markforged Holding Corp has no effect on the direction of HP i.e., HP and Markforged Holding go up and down completely randomly.
Pair Corralation between HP and Markforged Holding
Considering the 90-day investment horizon HP Inc is expected to generate 0.24 times more return on investment than Markforged Holding. However, HP Inc is 4.17 times less risky than Markforged Holding. It trades about 0.04 of its potential returns per unit of risk. Markforged Holding Corp is currently generating about -0.05 per unit of risk. If you would invest 3,263 in HP Inc on November 1, 2024 and sell it today you would earn a total of 27.50 from holding HP Inc or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Markforged Holding Corp
Performance |
| Timeline |
| HP Inc |
| Markforged Holding Corp |
HP and Markforged Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Markforged Holding
The main advantage of trading using opposite HP and Markforged Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Markforged Holding 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 Markforged Holding will offset losses from the drop in Markforged Holding's long position.The idea behind HP Inc and Markforged Holding Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Markforged Holding vs. Stratasys | Markforged Holding vs. Desktop Metal | Markforged Holding vs. 3D Systems | Markforged Holding vs. Nano Dimension |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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