Correlation Between Nano Dimension and 3D Systems

Can any of the company-specific risk be diversified away by investing in both Nano Dimension and 3D Systems 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 3D Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nano Dimension and 3D Systems, you can compare the effects of market volatilities on Nano Dimension and 3D Systems 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 3D Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Dimension and 3D Systems.

Diversification Opportunities for Nano Dimension and 3D Systems

0.43

Correlation Coefficient

Nano Dimension  3D Systems

Very weak diversification

The 3 months correlation between Nano and DDD is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and 3D Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3D Systems 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 3D Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3D Systems has no effect on the direction of Nano Dimension i.e., Nano Dimension and 3D Systems go up and down completely randomly.

Pair Corralation between Nano Dimension and 3D Systems

Given the investment horizon of 90 days Nano Dimension is expected to under-perform the 3D Systems. But the stock apears to be less risky and, when comparing its historical volatility, Nano Dimension is 2.76 times less risky than 3D Systems. The stock trades about -0.08 of its potential returns per unit of risk. The 3D Systems is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  189.00  in 3D Systems on May 1, 2025 and sell it today you would lose (22.00) from holding 3D Systems or give up 11.64% of portfolio value over 90 days.

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

Nano Dimension  vs.  3D Systems

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 latest uncertain performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

3D Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3D Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, 3D Systems is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nano Dimension and 3D Systems

The main advantage of trading using opposite Nano Dimension and 3D Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Dimension position performs unexpectedly, 3D Systems 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 3D Systems will offset losses from the drop in 3D Systems' long position.

The idea behind Nano Dimension and 3D 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.