Correlation Between Bird Global and Fathom Digital

Can any of the company-specific risk be diversified away by investing in both Bird Global and Fathom Digital 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 Bird Global and Fathom Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bird Global and Fathom Digital Manufacturing, you can compare the effects of market volatilities on Bird Global and Fathom Digital 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 Bird Global with a short position of Fathom Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bird Global and Fathom Digital.

Diversification Opportunities for Bird Global and Fathom Digital

0.58

Correlation Coefficient

Bird Global  Fathom Digital

Very weak diversification

The 3 months correlation between Bird and Fathom is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bird Global and Fathom Digital Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fathom Digital Manuf and Bird Global 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 Bird Global are associated (or correlated) with Fathom Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fathom Digital Manuf has no effect on the direction of Bird Global i.e., Bird Global and Fathom Digital go up and down completely randomly.

Pair Corralation between Bird Global and Fathom Digital

If you would invest  46.00  in Fathom Digital Manufacturing on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Fathom Digital Manufacturing or generate 0.0% return on investment over 90 days.

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

Bird Global  vs.  Fathom Digital Manufacturing

Bird Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bird Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Bird Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Fathom Digital Manuf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fathom Digital Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Fathom Digital is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bird Global and Fathom Digital

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

The idea behind Bird Global and Fathom Digital Manufacturing 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.