Correlation Between MKDWELL Tech and Xometry

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

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

Diversification Opportunities for MKDWELL Tech and Xometry

0.05

Correlation Coefficient

MKDWELL Tech  Xometry

Significant diversification

The 3 months correlation between MKDWELL and Xometry is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MKDWELL Tech Warrants and Xometry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xometry and MKDWELL Tech 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 MKDWELL Tech Warrants are associated (or correlated) with Xometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xometry has no effect on the direction of MKDWELL Tech i.e., MKDWELL Tech and Xometry go up and down completely randomly.

Pair Corralation between MKDWELL Tech and Xometry

Assuming the 90 days horizon MKDWELL Tech Warrants is expected to under-perform the Xometry. In addition to that, MKDWELL Tech is 5.09 times more volatile than Xometry. It trades about -0.06 of its total potential returns per unit of risk. Xometry is currently generating about -0.08 per unit of volatility. If you would invest  3,660  in Xometry on October 20, 2024 and sell it today you would lose (337.00) from holding Xometry or give up 9.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	73.68%
Values	Daily Returns

MKDWELL Tech Warrants  vs.  Xometry

MKDWELL Tech Warrants

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MKDWELL Tech Warrants are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MKDWELL Tech showed solid returns over the last few months and may actually be approaching a breakup point.

Xometry

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xometry are ranked lower than 13 (%) 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.

Pair Trading with MKDWELL Tech and Xometry

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

The idea behind MKDWELL Tech Warrants and Xometry 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.