Correlation Between Markforged Holding and Ageagle Aerial

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

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

Diversification Opportunities for Markforged Holding and Ageagle Aerial

-0.83

Correlation Coefficient

Markforged Holding  Ageagle Aerial

Pay attention - limited upside

The 3 months correlation between Markforged and Ageagle is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Markforged Holding Corp and Ageagle Aerial Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ageagle Aerial Systems and Markforged Holding 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 Markforged Holding Corp are associated (or correlated) with Ageagle Aerial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ageagle Aerial Systems has no effect on the direction of Markforged Holding i.e., Markforged Holding and Ageagle Aerial go up and down completely randomly.

Pair Corralation between Markforged Holding and Ageagle Aerial

Given the investment horizon of 90 days Markforged Holding is expected to generate 1.54 times less return on investment than Ageagle Aerial. But when comparing it to its historical volatility, Markforged Holding Corp is 2.44 times less risky than Ageagle Aerial. It trades about 0.12 of its potential returns per unit of risk. Ageagle Aerial Systems is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,600  in Ageagle Aerial Systems on September 3, 2024 and sell it today you would lose (706.00) from holding Ageagle Aerial Systems or give up 44.12% of portfolio value over 90 days.

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

Markforged Holding Corp  vs.  Ageagle Aerial Systems

Markforged Holding Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Markforged Holding Corp are ranked lower than 9 (%) 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.

Ageagle Aerial Systems

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ageagle Aerial Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Ageagle Aerial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Markforged Holding and Ageagle Aerial

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

The idea behind Markforged Holding Corp and Ageagle Aerial Systems 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.