Correlation Between Markforged Holding and NetApp
Can any of the company-specific risk be diversified away by investing in both Markforged Holding and NetApp 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 Markforged Holding and NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Markforged Holding Corp and NetApp Inc, you can compare the effects of market volatilities on Markforged Holding and NetApp 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 Markforged Holding with a short position of NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markforged Holding and NetApp.
Diversification Opportunities for Markforged Holding and NetApp
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Markforged and NetApp is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Markforged Holding Corp and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Markforged Holding 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 Markforged Holding Corp are associated (or correlated) with NetApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetApp Inc has no effect on the direction of Markforged Holding i.e., Markforged Holding and NetApp go up and down completely randomly.
Pair Corralation between Markforged Holding and NetApp
Given the investment horizon of 90 days Markforged Holding is expected to generate 35.39 times less return on investment than NetApp. In addition to that, Markforged Holding is 3.91 times more volatile than NetApp Inc. It trades about 0.0 of its total potential returns per unit of risk. NetApp Inc is currently generating about 0.09 per unit of volatility. If you would invest 6,807 in NetApp Inc on August 27, 2024 and sell it today you would earn a total of 5,427 from holding NetApp Inc or generate 79.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Markforged Holding Corp vs. NetApp Inc
Performance |
| Timeline |
| Markforged Holding Corp |
| NetApp Inc |
Markforged Holding and NetApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Markforged Holding and NetApp
The main advantage of trading using opposite Markforged Holding and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markforged Holding position performs unexpectedly, NetApp 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 NetApp will offset losses from the drop in NetApp's long position.| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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