Correlation Between Nano Dimension and XAAR PLC

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

By analyzing existing cross correlation between Nano Dimension and XAAR PLC LS 10, you can compare the effects of market volatilities on Nano Dimension and XAAR PLC 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 XAAR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Dimension and XAAR PLC.

Diversification Opportunities for Nano Dimension and XAAR PLC

-0.54

Correlation Coefficient

Nano Dimension  XAAR PLC

Excellent diversification

The 3 months correlation between Nano and XAAR is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and XAAR PLC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAAR PLC LS 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 XAAR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAAR PLC LS has no effect on the direction of Nano Dimension i.e., Nano Dimension and XAAR PLC go up and down completely randomly.

Pair Corralation between Nano Dimension and XAAR PLC

Assuming the 90 days trading horizon Nano Dimension is expected to under-perform the XAAR PLC. But the stock apears to be less risky and, when comparing its historical volatility, Nano Dimension is 1.07 times less risky than XAAR PLC. The stock trades about -0.04 of its potential returns per unit of risk. The XAAR PLC LS 10 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  116.00  in XAAR PLC LS 10 on April 24, 2025 and sell it today you would earn a total of  22.00  from holding XAAR PLC LS 10 or generate 18.97% 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.  XAAR PLC LS 10

Nano Dimension

Risk-Adjusted Performance

Weak

Over the last 90 days Nano Dimension has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nano Dimension is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

XAAR PLC LS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XAAR PLC LS 10 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, XAAR PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nano Dimension and XAAR PLC

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

The idea behind Nano Dimension and XAAR PLC LS 10 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.