Correlation Between Nano Dimension and Dell Technologies

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

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

Diversification Opportunities for Nano Dimension and Dell Technologies

0.6

Correlation Coefficient

Nano Dimension  Dell Technologies

Poor diversification

The 3 months correlation between Nano and Dell is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and Dell Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dell Technologies and Nano Dimension 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 Nano Dimension are associated (or correlated) with Dell Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dell Technologies has no effect on the direction of Nano Dimension i.e., Nano Dimension and Dell Technologies go up and down completely randomly.

Pair Corralation between Nano Dimension and Dell Technologies

Given the investment horizon of 90 days Nano Dimension is expected to under-perform the Dell Technologies. In addition to that, Nano Dimension is 1.2 times more volatile than Dell Technologies. It trades about -0.17 of its total potential returns per unit of risk. Dell Technologies is currently generating about -0.09 per unit of volatility. If you would invest  11,686  in Dell Technologies on December 27, 2024 and sell it today you would lose (2,039) from holding Dell Technologies or give up 17.45% of portfolio value over 90 days.

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

Nano Dimension  vs.  Dell Technologies

Nano Dimension

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano Dimension 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 fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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.

Pair Trading with Nano Dimension and Dell Technologies

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

The idea behind Nano Dimension and Dell Technologies 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.