Correlation Between Xometry and Dover

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

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

Diversification Opportunities for Xometry and Dover

0.26

Correlation Coefficient

Xometry  Dover

Modest diversification

The 3 months correlation between Xometry and Dover is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Xometry and Dover in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dover and Xometry 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 Xometry are associated (or correlated) with Dover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dover has no effect on the direction of Xometry i.e., Xometry and Dover go up and down completely randomly.

Pair Corralation between Xometry and Dover

Given the investment horizon of 90 days Xometry is expected to generate 4.14 times more return on investment than Dover. However, Xometry is 4.14 times more volatile than Dover. It trades about 0.05 of its potential returns per unit of risk. Dover is currently generating about 0.06 per unit of risk. If you would invest  3,352  in Xometry on October 7, 2024 and sell it today you would earn a total of  968.00  from holding Xometry or generate 28.88% return on investment over 90 days.

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

Xometry  vs.  Dover

Xometry

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Xometry are ranked lower than 26 (%) 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.

Dover

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dover are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Dover is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Xometry and Dover

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

The idea behind Xometry and Dover 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.