Correlation Between FiscalNote Holdings and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both FiscalNote Holdings 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 FiscalNote Holdings and Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FiscalNote Holdings and Desktop Metal, you can compare the effects of market volatilities on FiscalNote Holdings 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 FiscalNote Holdings with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of FiscalNote Holdings and Desktop Metal.
Diversification Opportunities for FiscalNote Holdings and Desktop Metal
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FiscalNote and Desktop is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and FiscalNote Holdings 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 FiscalNote Holdings 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 FiscalNote Holdings i.e., FiscalNote Holdings and Desktop Metal go up and down completely randomly.
Pair Corralation between FiscalNote Holdings and Desktop Metal
Given the investment horizon of 90 days FiscalNote Holdings is expected to generate 0.75 times more return on investment than Desktop Metal. However, FiscalNote Holdings is 1.33 times less risky than Desktop Metal. It trades about 0.26 of its potential returns per unit of risk. Desktop Metal is currently generating about -0.25 per unit of risk. If you would invest 120.00 in FiscalNote Holdings on February 24, 2024 and sell it today you would earn a total of 34.00 from holding FiscalNote Holdings or generate 28.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FiscalNote Holdings vs. Desktop Metal
Performance |
Timeline |
FiscalNote Holdings |
Desktop Metal |
FiscalNote Holdings and Desktop Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FiscalNote Holdings and Desktop Metal
The main advantage of trading using opposite FiscalNote Holdings and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FiscalNote Holdings 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.FiscalNote Holdings vs. CLARIVATE PLC | FiscalNote Holdings vs. Broadridge Financial Solutions | FiscalNote Holdings vs. CDW Corp | FiscalNote Holdings vs. International Business Machines |
Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Velo3D Inc | Desktop Metal vs. Markforged Holding Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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