Correlation Between Proto Labs and SG Blocks
Can any of the company-specific risk be diversified away by investing in both Proto Labs and SG Blocks 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 Proto Labs and SG Blocks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proto Labs and SG Blocks, you can compare the effects of market volatilities on Proto Labs and SG Blocks 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 Proto Labs with a short position of SG Blocks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proto Labs and SG Blocks.
Diversification Opportunities for Proto Labs and SG Blocks
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Proto and SGBX is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Proto Labs and SG Blocks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SG Blocks and Proto Labs 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 Proto Labs are associated (or correlated) with SG Blocks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SG Blocks has no effect on the direction of Proto Labs i.e., Proto Labs and SG Blocks go up and down completely randomly.
Pair Corralation between Proto Labs and SG Blocks
Given the investment horizon of 90 days Proto Labs is expected to generate 0.34 times more return on investment than SG Blocks. However, Proto Labs is 2.95 times less risky than SG Blocks. It trades about 0.03 of its potential returns per unit of risk. SG Blocks is currently generating about -0.07 per unit of risk. If you would invest 3,620 in Proto Labs on August 26, 2024 and sell it today you would earn a total of 530.00 from holding Proto Labs or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proto Labs vs. SG Blocks
Performance |
| Timeline |
| Proto Labs |
| SG Blocks |
Proto Labs and SG Blocks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proto Labs and SG Blocks
The main advantage of trading using opposite Proto Labs and SG Blocks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proto Labs position performs unexpectedly, SG Blocks 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 SG Blocks will offset losses from the drop in SG Blocks' long position.| Proto Labs vs. Dave Warrants | Proto Labs vs. Evolv Technologies Holdings | Proto Labs vs. Aquagold International | Proto Labs vs. Morningstar Unconstrained Allocation |
| SG Blocks vs. Dave Warrants | SG Blocks vs. Evolv Technologies Holdings | SG Blocks vs. Aquagold International | SG Blocks vs. Morningstar Unconstrained Allocation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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