Correlation Between AGM Group and Desktop Metal

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

By analyzing existing cross correlation between AGM Group Holdings and Desktop Metal, you can compare the effects of market volatilities on AGM Group 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 AGM Group with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGM Group and Desktop Metal.

Diversification Opportunities for AGM Group and Desktop Metal

0.09

Correlation Coefficient

AGM Group  Desktop Metal

Significant diversification

The 3 months correlation between AGM and Desktop is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AGM Group Holdings and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and AGM Group 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 AGM Group 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 AGM Group i.e., AGM Group and Desktop Metal go up and down completely randomly.

Pair Corralation between AGM Group and Desktop Metal

Given the investment horizon of 90 days AGM Group Holdings is expected to under-perform the Desktop Metal. In addition to that, AGM Group is 1.41 times more volatile than Desktop Metal. It trades about -0.14 of its total potential returns per unit of risk. Desktop Metal is currently generating about 0.12 per unit of volatility. If you would invest  241.00  in Desktop Metal on December 27, 2024 and sell it today you would earn a total of  212.00  from holding Desktop Metal or generate 87.97% return on investment over 90 days.

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

AGM Group Holdings  vs.  Desktop Metal

AGM Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGM Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Desktop Metal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Desktop Metal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Desktop Metal displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGM Group and Desktop Metal

The main advantage of trading using opposite AGM Group and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGM Group 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.

The idea behind AGM Group Holdings and Desktop Metal 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.