Correlation Between Logitech International and Nano Dimension
Can any of the company-specific risk be diversified away by investing in both Logitech International and Nano Dimension 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 Nano Dimension 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 Nano Dimension, you can compare the effects of market volatilities on Logitech International and Nano Dimension 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 Nano Dimension. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logitech International and Nano Dimension.
Diversification Opportunities for Logitech International and Nano Dimension
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Logitech and Nano is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Logitech International SA and Nano Dimension in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Dimension 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 Nano Dimension. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Dimension has no effect on the direction of Logitech International i.e., Logitech International and Nano Dimension go up and down completely randomly.
Pair Corralation between Logitech International and Nano Dimension
Given the investment horizon of 90 days Logitech International SA is expected to generate 0.7 times more return on investment than Nano Dimension. However, Logitech International SA is 1.43 times less risky than Nano Dimension. It trades about -0.07 of its potential returns per unit of risk. Nano Dimension is currently generating about -0.13 per unit of risk. If you would invest 8,372 in Logitech International SA on August 29, 2024 and sell it today you would lose (271.00) from holding Logitech International SA or give up 3.24% 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. Nano Dimension
Performance |
| Timeline |
| Logitech International |
| Nano Dimension |
Logitech International and Nano Dimension Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logitech International and Nano Dimension
The main advantage of trading using opposite Logitech International and Nano Dimension positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logitech International position performs unexpectedly, Nano Dimension 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 Nano Dimension will offset losses from the drop in Nano Dimension's long position.| Logitech International vs. Pure Storage | Logitech International vs. Seagate Technology PLC | Logitech International vs. HP Inc | Logitech International vs. Dell Technologies |
| Nano Dimension vs. Desktop Metal | Nano Dimension vs. 3D Systems | Nano Dimension vs. Markforged Holding Corp | Nano Dimension 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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