Correlation Between DPCM Capital and Markforged Holding

Can any of the company-specific risk be diversified away by investing in both DPCM Capital and Markforged Holding 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 DPCM Capital and Markforged Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DPCM Capital and Markforged Holding Corp, you can compare the effects of market volatilities on DPCM Capital and Markforged Holding 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 DPCM Capital with a short position of Markforged Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of DPCM Capital and Markforged Holding.

Diversification Opportunities for DPCM Capital and Markforged Holding

0.43

Correlation Coefficient

DPCM Capital  Markforged Holding

Very weak diversification

The 3 months correlation between DPCM and Markforged is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding DPCM Capital and Markforged Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markforged Holding Corp and DPCM Capital 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 DPCM Capital are associated (or correlated) with Markforged Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markforged Holding Corp has no effect on the direction of DPCM Capital i.e., DPCM Capital and Markforged Holding go up and down completely randomly.

Pair Corralation between DPCM Capital and Markforged Holding

Given the investment horizon of 90 days DPCM Capital is expected to generate 1.59 times more return on investment than Markforged Holding. However, DPCM Capital is 1.59 times more volatile than Markforged Holding Corp. It trades about 0.0 of its potential returns per unit of risk. Markforged Holding Corp is currently generating about -0.02 per unit of risk. If you would invest  986.00  in DPCM Capital on February 1, 2024 and sell it today you would lose (849.00) from holding DPCM Capital or give up 86.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

DPCM Capital  vs.  Markforged Holding Corp

DPCM Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DPCM Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, DPCM Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Markforged Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Markforged Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Markforged Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DPCM Capital and Markforged Holding

The main advantage of trading using opposite DPCM Capital and Markforged Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DPCM Capital position performs unexpectedly, Markforged Holding 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 Markforged Holding will offset losses from the drop in Markforged Holding's long position.

The idea behind DPCM Capital and Markforged Holding Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..