Correlation Between Logitech International and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both Logitech International 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 Logitech International and Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logitech International SA and Desktop Metal, you can compare the effects of market volatilities on Logitech International 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 Logitech International with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Desktop Metal.
Diversification Opportunities for Logitech International and Desktop Metal
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Logitech and Desktop is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and Logitech International 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 Logitech International SA 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 Logitech International i.e., Logitech International and Desktop Metal go up and down completely randomly.
Pair Corralation between Logitech International and Desktop Metal
Given the investment horizon of 90 days Logitech International SA is expected to generate 0.41 times more return on investment than Desktop Metal. However, Logitech International SA is 2.46 times less risky than Desktop Metal. It trades about -0.09 of its potential returns per unit of risk. Desktop Metal is currently generating about -0.14 per unit of risk. If you would invest 8,270 in Logitech International SA on August 31, 2024 and sell it today you would lose (345.00) from holding Logitech International SA or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Logitech International SA vs. Desktop Metal
Performance |
| Timeline |
| Logitech International |
| Desktop Metal |
Logitech International and Desktop Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logitech International and Desktop Metal
The main advantage of trading using opposite Logitech International and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International 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.| Logitech International vs. Pure Storage | Logitech International vs. Seagate Technology PLC | Logitech International vs. HP Inc | Logitech International vs. Dell Technologies |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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