Correlation Between 3D Systems and Quantum

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

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

Diversification Opportunities for 3D Systems and Quantum

0.45

Correlation Coefficient

3D Systems  Quantum

Very weak diversification

The 3 months correlation between DDD and Quantum is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems and Quantum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum 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 Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum has no effect on the direction of 3D Systems i.e., 3D Systems and Quantum go up and down completely randomly.

Pair Corralation between 3D Systems and Quantum

Considering the 90-day investment horizon 3D Systems is expected to generate 10.9 times less return on investment than Quantum. But when comparing it to its historical volatility, 3D Systems is 5.99 times less risky than Quantum. It trades about 0.2 of its potential returns per unit of risk. Quantum is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  296.00  in Quantum on September 18, 2024 and sell it today you would earn a total of  2,012  from holding Quantum or generate 679.73% return on investment over 90 days.

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

3D Systems  vs.  Quantum

3D Systems

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 3D Systems are ranked lower than 10 (%) 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.

Quantum

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 3D Systems and Quantum

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

The idea behind 3D Systems and Quantum 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.