Correlation Between Desktop Metal and BlackBerry
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and BlackBerry 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 Desktop Metal and BlackBerry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and BlackBerry, you can compare the effects of market volatilities on Desktop Metal and BlackBerry 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 Desktop Metal with a short position of BlackBerry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and BlackBerry.
Diversification Opportunities for Desktop Metal and BlackBerry
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Desktop and BlackBerry is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and BlackBerry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackBerry and Desktop Metal 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 Desktop Metal are associated (or correlated) with BlackBerry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackBerry has no effect on the direction of Desktop Metal i.e., Desktop Metal and BlackBerry go up and down completely randomly.
Pair Corralation between Desktop Metal and BlackBerry
Allowing for the 90-day total investment horizon Desktop Metal is expected to generate 1.75 times more return on investment than BlackBerry. However, Desktop Metal is 1.75 times more volatile than BlackBerry. It trades about -0.01 of its potential returns per unit of risk. BlackBerry is currently generating about -0.02 per unit of risk. If you would invest 365.00 in Desktop Metal on January 18, 2024 and sell it today you would lose (280.00) from holding Desktop Metal or give up 76.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Desktop Metal vs. BlackBerry
Performance |
Timeline |
Desktop Metal |
BlackBerry |
Desktop Metal and BlackBerry Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Desktop Metal and BlackBerry
The main advantage of trading using opposite Desktop Metal and BlackBerry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, BlackBerry 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 BlackBerry will offset losses from the drop in BlackBerry's long position.Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Velo3D Inc | Desktop Metal vs. Markforged Holding Corp |
BlackBerry vs. Cloudflare | BlackBerry vs. Okta Inc | BlackBerry vs. Adobe Systems Incorporated | BlackBerry vs. Nutanix |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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