Correlation Between Xometry and KonaTel

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

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

Diversification Opportunities for Xometry and KonaTel

-0.8

Correlation Coefficient

Xometry  KonaTel

Pay attention - limited upside

The 3 months correlation between Xometry and KonaTel is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xometry and KonaTel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KonaTel 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 KonaTel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KonaTel has no effect on the direction of Xometry i.e., Xometry and KonaTel go up and down completely randomly.

Pair Corralation between Xometry and KonaTel

Given the investment horizon of 90 days Xometry is expected to generate 0.33 times more return on investment than KonaTel. However, Xometry is 3.04 times less risky than KonaTel. It trades about 0.52 of its potential returns per unit of risk. KonaTel is currently generating about 0.05 per unit of risk. If you would invest  3,105  in Xometry on September 29, 2024 and sell it today you would earn a total of  1,313  from holding Xometry or generate 42.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Xometry  vs.  KonaTel

Xometry

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xometry are ranked lower than 25 (%) 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.

KonaTel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KonaTel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Xometry and KonaTel

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

The idea behind Xometry and KonaTel 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.