Correlation Between Markforged Holding and Velo3D
Can any of the company-specific risk be diversified away by investing in both Markforged Holding and Velo3D 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 Velo3D 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 Velo3D Inc, you can compare the effects of market volatilities on Markforged Holding and Velo3D 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 Velo3D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markforged Holding and Velo3D.
Diversification Opportunities for Markforged Holding and Velo3D
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Markforged and Velo3D is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Markforged Holding Corp and Velo3D Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Velo3D 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 Velo3D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Velo3D Inc has no effect on the direction of Markforged Holding i.e., Markforged Holding and Velo3D go up and down completely randomly.
Pair Corralation between Markforged Holding and Velo3D
Given the investment horizon of 90 days Markforged Holding Corp is expected to generate 0.78 times more return on investment than Velo3D. However, Markforged Holding Corp is 1.29 times less risky than Velo3D. It trades about 0.01 of its potential returns per unit of risk. Velo3D Inc is currently generating about -0.06 per unit of risk. If you would invest 1,030 in Markforged Holding Corp on August 27, 2024 and sell it today you would lose (592.00) from holding Markforged Holding Corp or give up 57.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.73% |
| Values | Daily Returns |
Markforged Holding Corp vs. Velo3D Inc
Performance |
| Timeline |
| Markforged Holding Corp |
| Velo3D Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Markforged Holding and Velo3D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Markforged Holding and Velo3D
The main advantage of trading using opposite Markforged Holding and Velo3D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markforged Holding position performs unexpectedly, Velo3D 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 Velo3D will offset losses from the drop in Velo3D'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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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