Correlation Between CDL INVESTMENT and Stratasys

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

By analyzing existing cross correlation between CDL INVESTMENT and Stratasys, you can compare the effects of market volatilities on CDL INVESTMENT and Stratasys 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 CDL INVESTMENT with a short position of Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Stratasys.

Diversification Opportunities for CDL INVESTMENT and Stratasys

-0.1

Correlation Coefficient

CDL INVESTMENT  Stratasys

Good diversification

The 3 months correlation between CDL and Stratasys is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys and CDL INVESTMENT 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 CDL INVESTMENT are associated (or correlated) with Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of CDL INVESTMENT i.e., CDL INVESTMENT and Stratasys go up and down completely randomly.

Pair Corralation between CDL INVESTMENT and Stratasys

Assuming the 90 days trading horizon CDL INVESTMENT is expected to under-perform the Stratasys. But the stock apears to be less risky and, when comparing its historical volatility, CDL INVESTMENT is 2.12 times less risky than Stratasys. The stock trades about -0.05 of its potential returns per unit of risk. The Stratasys is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  907.00  in Stratasys on December 21, 2024 and sell it today you would earn a total of  43.00  from holding Stratasys or generate 4.74% return on investment over 90 days.

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

CDL INVESTMENT  vs.  Stratasys

CDL INVESTMENT

Risk-Adjusted Performance

Very Weak

Over the last 90 days CDL INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Stratasys

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Stratasys may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CDL INVESTMENT and Stratasys

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

The idea behind CDL INVESTMENT and Stratasys 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.