Correlation Between Nano Dimension and Ebang International

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

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

Diversification Opportunities for Nano Dimension and Ebang International

0.25

Correlation Coefficient

Nano Dimension  Ebang International

Modest diversification

The 3 months correlation between Nano and Ebang is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and Ebang International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebang International 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 Ebang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebang International has no effect on the direction of Nano Dimension i.e., Nano Dimension and Ebang International go up and down completely randomly.

Pair Corralation between Nano Dimension and Ebang International

Given the investment horizon of 90 days Nano Dimension is expected to under-perform the Ebang International. But the stock apears to be less risky and, when comparing its historical volatility, Nano Dimension is 2.07 times less risky than Ebang International. The stock trades about -0.21 of its potential returns per unit of risk. The Ebang International Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  580.00  in Ebang International Holdings on August 6, 2024 and sell it today you would earn a total of  56.00  from holding Ebang International Holdings or generate 9.66% return on investment over 90 days.

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

Nano Dimension  vs.  Ebang International Holdings

Nano Dimension

Risk-Adjusted Performance

1 of 100

Very Weak

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

Ebang International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ebang International Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ebang International may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Nano Dimension and Ebang International

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

The idea behind Nano Dimension and Ebang International Holdings 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.