Correlation Between Dell Technologies and Markforged Holding

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

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

Diversification Opportunities for Dell Technologies and Markforged Holding

0.28

Correlation Coefficient

Dell Technologies  Markforged Holding

Modest diversification

The 3 months correlation between Dell and Markforged is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dell Technologies 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 Dell Technologies 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 Dell Technologies 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 Dell Technologies i.e., Dell Technologies and Markforged Holding go up and down completely randomly.

Pair Corralation between Dell Technologies and Markforged Holding

Given the investment horizon of 90 days Dell Technologies is expected to under-perform the Markforged Holding. But the stock apears to be less risky and, when comparing its historical volatility, Dell Technologies is 1.96 times less risky than Markforged Holding. The stock trades about -0.1 of its potential returns per unit of risk. The Markforged Holding Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  314.00  in Markforged Holding Corp on December 29, 2024 and sell it today you would earn a total of  149.00  from holding Markforged Holding Corp or generate 47.45% return on investment over 90 days.

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

Dell Technologies  vs.  Markforged Holding Corp

Dell Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dell Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Markforged Holding Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Markforged Holding Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Markforged Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dell Technologies and Markforged Holding

The main advantage of trading using opposite Dell Technologies and Markforged Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dell Technologies 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 Dell Technologies 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.