Correlation Between Electrovaya Common and Stratasys

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

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

Diversification Opportunities for Electrovaya Common and Stratasys

0.62

Correlation Coefficient

Electrovaya Common  Stratasys

Poor diversification

The 3 months correlation between Electrovaya and Stratasys is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys and Electrovaya Common 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 Electrovaya Common Shares 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 Electrovaya Common i.e., Electrovaya Common and Stratasys go up and down completely randomly.

Pair Corralation between Electrovaya Common and Stratasys

Given the investment horizon of 90 days Electrovaya Common is expected to generate 1.09 times less return on investment than Stratasys. In addition to that, Electrovaya Common is 1.01 times more volatile than Stratasys. It trades about 0.07 of its total potential returns per unit of risk. Stratasys is currently generating about 0.08 per unit of volatility. If you would invest  773.00  in Stratasys on October 6, 2024 and sell it today you would earn a total of  135.00  from holding Stratasys or generate 17.46% return on investment over 90 days.

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

Electrovaya Common Shares  vs.  Stratasys

Electrovaya Common Shares

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

Stratasys

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Electrovaya Common and Stratasys

The main advantage of trading using opposite Electrovaya Common and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common 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 Electrovaya Common Shares 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.