Correlation Between Rogers and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both Rogers and Desktop Metal 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 Rogers and Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers and Desktop Metal, you can compare the effects of market volatilities on Rogers and Desktop Metal 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 Rogers with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers and Desktop Metal.
Diversification Opportunities for Rogers and Desktop Metal
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rogers and Desktop is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Rogers and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and Rogers 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 Rogers are associated (or correlated) with Desktop Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desktop Metal has no effect on the direction of Rogers i.e., Rogers and Desktop Metal go up and down completely randomly.
Pair Corralation between Rogers and Desktop Metal
Considering the 90-day investment horizon Rogers is expected to generate 0.52 times more return on investment than Desktop Metal. However, Rogers is 1.94 times less risky than Desktop Metal. It trades about 0.03 of its potential returns per unit of risk. Desktop Metal is currently generating about -0.14 per unit of risk. If you would invest 10,275 in Rogers on September 2, 2024 and sell it today you would earn a total of 83.00 from holding Rogers or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rogers vs. Desktop Metal
Performance |
| Timeline |
| Rogers |
| Desktop Metal |
Rogers and Desktop Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers and Desktop Metal
The main advantage of trading using opposite Rogers and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers position performs unexpectedly, Desktop Metal 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 Desktop Metal will offset losses from the drop in Desktop Metal's long position.| Rogers vs. Knowles Cor | Rogers vs. Ubiquiti Networks | Rogers vs. AmpliTech Group | Rogers vs. Viavi Solutions |
| Desktop Metal vs. Knowles Cor | Desktop Metal vs. Ubiquiti Networks | Desktop Metal vs. AmpliTech Group | Desktop Metal vs. Viavi Solutions |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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