Correlation Between Desktop Metal and PowerFleet,

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

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

Diversification Opportunities for Desktop Metal and PowerFleet,

-0.69

Correlation Coefficient

Desktop Metal  PowerFleet,

Excellent diversification

The 3 months correlation between Desktop and PowerFleet, is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and PowerFleet, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerFleet, 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 PowerFleet,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerFleet, has no effect on the direction of Desktop Metal i.e., Desktop Metal and PowerFleet, go up and down completely randomly.

Pair Corralation between Desktop Metal and PowerFleet,

Allowing for the 90-day total investment horizon Desktop Metal is expected to under-perform the PowerFleet,. But the stock apears to be less risky and, when comparing its historical volatility, Desktop Metal is 1.44 times less risky than PowerFleet,. The stock trades about -0.08 of its potential returns per unit of risk. The PowerFleet, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  463.00  in PowerFleet, on September 12, 2024 and sell it today you would earn a total of  223.00  from holding PowerFleet, or generate 48.16% return on investment over 90 days.

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

Desktop Metal  vs.  PowerFleet,

Desktop Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Desktop Metal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

PowerFleet,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PowerFleet, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, PowerFleet, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Desktop Metal and PowerFleet,

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

The idea behind Desktop Metal and PowerFleet, 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..