Correlation Between 3D Systems and Aeroports

Can any of the company-specific risk be diversified away by investing in both 3D Systems and Aeroports 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 3D Systems and Aeroports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3D Systems and Aeroports de Paris, you can compare the effects of market volatilities on 3D Systems and Aeroports 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 3D Systems with a short position of Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3D Systems and Aeroports.

Diversification Opportunities for 3D Systems and Aeroports

-0.47

Correlation Coefficient

3D Systems  Aeroports

Very good diversification

The 3 months correlation between DDD and Aeroports is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris and 3D Systems 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 3D Systems are associated (or correlated) with Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of 3D Systems i.e., 3D Systems and Aeroports go up and down completely randomly.

Pair Corralation between 3D Systems and Aeroports

Considering the 90-day investment horizon 3D Systems is expected to under-perform the Aeroports. In addition to that, 3D Systems is 2.79 times more volatile than Aeroports de Paris. It trades about -0.08 of its total potential returns per unit of risk. Aeroports de Paris is currently generating about 0.05 per unit of volatility. If you would invest  1,156  in Aeroports de Paris on December 28, 2024 and sell it today you would earn a total of  74.00  from holding Aeroports de Paris or generate 6.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

3D Systems  vs.  Aeroports de Paris

3D Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3D Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Aeroports de Paris

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aeroports de Paris are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Aeroports may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 3D Systems and Aeroports

The main advantage of trading using opposite 3D Systems and Aeroports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3D Systems position performs unexpectedly, Aeroports 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 Aeroports will offset losses from the drop in Aeroports' long position.

The idea behind 3D Systems and Aeroports de Paris 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.