Correlation Between Knowles Cor and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both Knowles Cor 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 Knowles Cor and Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and Desktop Metal, you can compare the effects of market volatilities on Knowles Cor 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 Knowles Cor with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Desktop Metal.
Diversification Opportunities for Knowles Cor and Desktop Metal
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Knowles and Desktop is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and Knowles Cor 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 Knowles Cor 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 Knowles Cor i.e., Knowles Cor and Desktop Metal go up and down completely randomly.
Pair Corralation between Knowles Cor and Desktop Metal
Allowing for the 90-day total investment horizon Knowles Cor is expected to under-perform the Desktop Metal. But the stock apears to be less risky and, when comparing its historical volatility, Knowles Cor is 5.38 times less risky than Desktop Metal. The stock trades about -0.41 of its potential returns per unit of risk. The Desktop Metal is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Desktop Metal on November 28, 2024 and sell it today you would earn a total of 5.00 from holding Desktop Metal or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Knowles Cor vs. Desktop Metal
Performance |
| Timeline |
| Knowles Cor |
| Desktop Metal |
Knowles Cor and Desktop Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and Desktop Metal
The main advantage of trading using opposite Knowles Cor and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor 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.| Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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