Correlation Between Nano Dimension and Canaan
Can any of the company-specific risk be diversified away by investing in both Nano Dimension and Canaan 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 Nano Dimension and Canaan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nano Dimension and Canaan Inc, you can compare the effects of market volatilities on Nano Dimension and Canaan 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 Nano Dimension with a short position of Canaan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Dimension and Canaan.
Diversification Opportunities for Nano Dimension and Canaan
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nano and Canaan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and Canaan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaan Inc and Nano Dimension 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 Nano Dimension are associated (or correlated) with Canaan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaan Inc has no effect on the direction of Nano Dimension i.e., Nano Dimension and Canaan go up and down completely randomly.
Pair Corralation between Nano Dimension and Canaan
Given the investment horizon of 90 days Nano Dimension is expected to under-perform the Canaan. But the stock apears to be less risky and, when comparing its historical volatility, Nano Dimension is 2.04 times less risky than Canaan. The stock trades about -0.05 of its potential returns per unit of risk. The Canaan Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 205.00 in Canaan Inc on November 1, 2024 and sell it today you would earn a total of 18.00 from holding Canaan Inc or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nano Dimension vs. Canaan Inc
Performance |
| Timeline |
| Nano Dimension |
| Canaan Inc |
Nano Dimension and Canaan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nano Dimension and Canaan
The main advantage of trading using opposite Nano Dimension and Canaan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Dimension position performs unexpectedly, Canaan 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 Canaan will offset losses from the drop in Canaan's long position.| Nano Dimension vs. Desktop Metal | Nano Dimension vs. 3D Systems | Nano Dimension vs. Markforged Holding Corp | Nano Dimension vs. Stratasys |
| Canaan vs. Diodes Incorporated | Canaan vs. Daqo New Energy | Canaan vs. Micron Technology | Canaan vs. MagnaChip Semiconductor |
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.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |