Correlation Between Danimer Scientific and H B

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

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

Diversification Opportunities for Danimer Scientific and H B

0.73

Correlation Coefficient

Danimer Scientific  H B

Poor diversification

The 3 months correlation between Danimer and FUL is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Danimer Scientific and H B Fuller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H B Fuller and Danimer Scientific 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 Danimer Scientific are associated (or correlated) with H B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H B Fuller has no effect on the direction of Danimer Scientific i.e., Danimer Scientific and H B go up and down completely randomly.

Pair Corralation between Danimer Scientific and H B

Given the investment horizon of 90 days Danimer Scientific is expected to under-perform the H B. In addition to that, Danimer Scientific is 4.88 times more volatile than H B Fuller. It trades about -0.25 of its total potential returns per unit of risk. H B Fuller is currently generating about -0.07 per unit of volatility. If you would invest  7,742  in H B Fuller on February 4, 2024 and sell it today you would lose (136.00) from holding H B Fuller or give up 1.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Danimer Scientific  vs.  H B Fuller

Danimer Scientific

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Danimer Scientific are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating primary indicators, Danimer Scientific reported solid returns over the last few months and may actually be approaching a breakup point.

H B Fuller

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in H B Fuller are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, H B is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Danimer Scientific and H B

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

The idea behind Danimer Scientific and H B Fuller 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.