Correlation Between Nano Dimension and HP
Can any of the company-specific risk be diversified away by investing in both Nano Dimension and HP 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 HP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nano Dimension and HP Inc, you can compare the effects of market volatilities on Nano Dimension and HP 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 HP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Dimension and HP.
Diversification Opportunities for Nano Dimension and HP
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nano and HP is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP 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 HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of Nano Dimension i.e., Nano Dimension and HP go up and down completely randomly.
Pair Corralation between Nano Dimension and HP
Given the investment horizon of 90 days Nano Dimension is expected to generate 2.39 times less return on investment than HP. In addition to that, Nano Dimension is 1.73 times more volatile than HP Inc. It trades about 0.01 of its total potential returns per unit of risk. HP Inc is currently generating about 0.05 per unit of volatility. If you would invest 2,640 in HP Inc on August 27, 2024 and sell it today you would earn a total of 1,173 from holding HP Inc or generate 44.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nano Dimension vs. HP Inc
Performance |
| Timeline |
| Nano Dimension |
| HP Inc |
Nano Dimension and HP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nano Dimension and HP
The main advantage of trading using opposite Nano Dimension and HP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Dimension position performs unexpectedly, HP 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 HP will offset losses from the drop in HP's long position.| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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