Correlation Between Xometry and E3 Metals

Can any of the company-specific risk be diversified away by investing in both Xometry and E3 Metals 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 Xometry and E3 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xometry and E3 Metals Corp, you can compare the effects of market volatilities on Xometry and E3 Metals 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 Xometry with a short position of E3 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xometry and E3 Metals.

Diversification Opportunities for Xometry and E3 Metals

-0.92

Correlation Coefficient

Xometry  E3 Metals

Pay attention - limited upside

The 3 months correlation between Xometry and EEMMF is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Xometry and E3 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E3 Metals Corp and Xometry 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 Xometry are associated (or correlated) with E3 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E3 Metals Corp has no effect on the direction of Xometry i.e., Xometry and E3 Metals go up and down completely randomly.

Pair Corralation between Xometry and E3 Metals

Given the investment horizon of 90 days Xometry is expected to generate 1.69 times more return on investment than E3 Metals. However, Xometry is 1.69 times more volatile than E3 Metals Corp. It trades about 0.32 of its potential returns per unit of risk. E3 Metals Corp is currently generating about -0.16 per unit of risk. If you would invest  1,851  in Xometry on September 26, 2024 and sell it today you would earn a total of  2,519  from holding Xometry or generate 136.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Xometry  vs.  E3 Metals Corp

Xometry

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xometry are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Xometry reported solid returns over the last few months and may actually be approaching a breakup point.

E3 Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E3 Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Xometry and E3 Metals

The main advantage of trading using opposite Xometry and E3 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xometry position performs unexpectedly, E3 Metals 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 E3 Metals will offset losses from the drop in E3 Metals' long position.

The idea behind Xometry and E3 Metals 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.