Correlation Between Desktop Metal and Corsair Gaming
Can any of the company-specific risk be diversified away by investing in both Desktop Metal and Corsair Gaming 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 Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and Corsair Gaming, you can compare the effects of market volatilities on Desktop Metal and Corsair Gaming 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 Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Corsair Gaming.
Diversification Opportunities for Desktop Metal and Corsair Gaming
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Desktop and Corsair is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming 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 Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of Desktop Metal i.e., Desktop Metal and Corsair Gaming go up and down completely randomly.
Pair Corralation between Desktop Metal and Corsair Gaming
Allowing for the 90-day total investment horizon Desktop Metal is expected to under-perform the Corsair Gaming. But the stock apears to be less risky and, when comparing its historical volatility, Desktop Metal is 1.06 times less risky than Corsair Gaming. The stock trades about -0.05 of its potential returns per unit of risk. The Corsair Gaming is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 583.00 in Corsair Gaming on September 12, 2024 and sell it today you would earn a total of 213.00 from holding Corsair Gaming or generate 36.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Desktop Metal vs. Corsair Gaming
Performance |
Timeline |
Desktop Metal |
Corsair Gaming |
Desktop Metal and Corsair Gaming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Desktop Metal and Corsair Gaming
The main advantage of trading using opposite Desktop Metal and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Stratasys | Desktop Metal vs. HP Inc |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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