Correlation Between 3D Systems and HP

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

By analyzing existing cross correlation between 3D Systems and HP Inc, you can compare the effects of market volatilities on 3D Systems and HP 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 HP. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3D Systems and HP.

Diversification Opportunities for 3D Systems and HP

-0.27

Correlation Coefficient

3D Systems  HP

Very good diversification

The 3 months correlation between DDD and HP is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc 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 HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of 3D Systems i.e., 3D Systems and HP go up and down completely randomly.

Pair Corralation between 3D Systems and HP

Considering the 90-day investment horizon 3D Systems is expected to generate 3.69 times more return on investment than HP. However, 3D Systems is 3.69 times more volatile than HP Inc. It trades about -0.01 of its potential returns per unit of risk. HP Inc is currently generating about -0.12 per unit of risk. If you would invest  360.00  in 3D Systems on December 2, 2024 and sell it today you would lose (21.00) from holding 3D Systems or give up 5.83% of portfolio value over 90 days.

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

3D Systems  vs.  HP Inc

3D Systems

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 3D Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, 3D Systems exhibited solid returns over the last few months and may actually be approaching a breakup point.

HP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with 3D Systems and HP

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

The idea behind 3D Systems and HP Inc 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.