Correlation Between 3D Systems and SES SA

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

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

Diversification Opportunities for 3D Systems and SES SA

-0.75

Correlation Coefficient

3D Systems  SES SA

Pay attention - limited upside

The 3 months correlation between DDD and SES is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of 3D Systems i.e., 3D Systems and SES SA go up and down completely randomly.

Pair Corralation between 3D Systems and SES SA

Considering the 90-day investment horizon 3D Systems is expected to under-perform the SES SA. But the stock apears to be less risky and, when comparing its historical volatility, 3D Systems is 1.06 times less risky than SES SA. The stock trades about -0.03 of its potential returns per unit of risk. The SES SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  494.00  in SES SA on September 2, 2024 and sell it today you would lose (150.00) from holding SES SA or give up 30.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	78.63%
Values	Daily Returns

3D Systems  vs.  SES SA

3D Systems

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 3D Systems are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, 3D Systems exhibited solid returns over the last few months and may actually be approaching a breakup point.

SES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with 3D Systems and SES SA

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

The idea behind 3D Systems and SES SA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.