Correlation Between Datalogic SpA and Nano Dimension

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

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

Diversification Opportunities for Datalogic SpA and Nano Dimension

-0.11

Correlation Coefficient

Datalogic SpA  Nano Dimension

Good diversification

The 3 months correlation between Datalogic and Nano is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Datalogic SpA and Nano Dimension in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Dimension and Datalogic SpA 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 Datalogic SpA are associated (or correlated) with Nano Dimension. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Dimension has no effect on the direction of Datalogic SpA i.e., Datalogic SpA and Nano Dimension go up and down completely randomly.

Pair Corralation between Datalogic SpA and Nano Dimension

Assuming the 90 days trading horizon Datalogic SpA is expected to under-perform the Nano Dimension. But the stock apears to be less risky and, when comparing its historical volatility, Datalogic SpA is 1.61 times less risky than Nano Dimension. The stock trades about -0.01 of its potential returns per unit of risk. The Nano Dimension is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  202.00  in Nano Dimension on September 27, 2024 and sell it today you would earn a total of  30.00  from holding Nano Dimension or generate 14.85% return on investment over 90 days.

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

Datalogic SpA  vs.  Nano Dimension

Datalogic SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Datalogic SpA 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 basic 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.

Nano Dimension

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Dimension are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nano Dimension may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Datalogic SpA and Nano Dimension

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

The idea behind Datalogic SpA and Nano Dimension 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.