Correlation Between Western Digital and Nano Dimension
Can any of the company-specific risk be diversified away by investing in both Western Digital and Nano Dimension 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 Western Digital and Nano Dimension into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Digital and Nano Dimension, you can compare the effects of market volatilities on Western Digital and Nano Dimension 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 Western Digital with a short position of Nano Dimension. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Digital and Nano Dimension.
Diversification Opportunities for Western Digital and Nano Dimension
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Nano is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Western Digital and Nano Dimension in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Dimension and Western Digital 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 Western Digital are associated (or correlated) with Nano Dimension. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Dimension has no effect on the direction of Western Digital i.e., Western Digital and Nano Dimension go up and down completely randomly.
Pair Corralation between Western Digital and Nano Dimension
Considering the 90-day investment horizon Western Digital is expected to generate 0.86 times more return on investment than Nano Dimension. However, Western Digital is 1.16 times less risky than Nano Dimension. It trades about 0.38 of its potential returns per unit of risk. Nano Dimension is currently generating about -0.05 per unit of risk. If you would invest 5,695 in Western Digital on June 9, 2025 and sell it today you would earn a total of 3,509 from holding Western Digital or generate 61.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Digital vs. Nano Dimension
Performance |
| Timeline |
| Western Digital |
| Nano Dimension |
Western Digital and Nano Dimension Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Digital and Nano Dimension
The main advantage of trading using opposite Western Digital and Nano Dimension positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Digital position performs unexpectedly, Nano Dimension 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 Nano Dimension will offset losses from the drop in Nano Dimension's long position.| Western Digital vs. NetApp Inc | Western Digital vs. Logitech International SA | Western Digital vs. HP Inc | Western Digital vs. Dell Technologies |
| Nano Dimension vs. NetApp Inc | Nano Dimension vs. Arista Networks | Nano Dimension vs. 3D Systems | Nano Dimension vs. Stratasys |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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