Correlation Between Nano Dimension and ELECOM

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

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

Diversification Opportunities for Nano Dimension and ELECOM

-0.55

Correlation Coefficient

Nano Dimension  ELECOM

Excellent diversification

The 3 months correlation between Nano and ELECOM is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and ELECOM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECOM LTD 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 ELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECOM LTD has no effect on the direction of Nano Dimension i.e., Nano Dimension and ELECOM go up and down completely randomly.

Pair Corralation between Nano Dimension and ELECOM

Assuming the 90 days trading horizon Nano Dimension is expected to under-perform the ELECOM. In addition to that, Nano Dimension is 1.96 times more volatile than ELECOM LTD. It trades about -0.07 of its total potential returns per unit of risk. ELECOM LTD is currently generating about 0.08 per unit of volatility. If you would invest  995.00  in ELECOM LTD on April 25, 2025 and sell it today you would earn a total of  65.00  from holding ELECOM LTD or generate 6.53% return on investment over 90 days.

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

Nano Dimension  vs.  ELECOM LTD

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ELECOM LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ELECOM LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ELECOM may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Nano Dimension and ELECOM

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

The idea behind Nano Dimension and ELECOM LTD 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.