Correlation Between Stratasys and Chester Mining

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

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

Diversification Opportunities for Stratasys and Chester Mining

-0.21

Correlation Coefficient

Stratasys  Chester Mining

Very good diversification

The 3 months correlation between Stratasys and Chester is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Chester Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chester Mining and Stratasys 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 Stratasys are associated (or correlated) with Chester Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chester Mining has no effect on the direction of Stratasys i.e., Stratasys and Chester Mining go up and down completely randomly.

Pair Corralation between Stratasys and Chester Mining

Given the investment horizon of 90 days Stratasys is expected to generate 0.72 times more return on investment than Chester Mining. However, Stratasys is 1.4 times less risky than Chester Mining. It trades about 0.13 of its potential returns per unit of risk. Chester Mining is currently generating about -0.12 per unit of risk. If you would invest  742.00  in Stratasys on September 15, 2024 and sell it today you would earn a total of  266.00  from holding Stratasys or generate 35.85% return on investment over 90 days.

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

Stratasys  vs.  Chester Mining

Stratasys

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Stratasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Chester Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chester Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Stratasys and Chester Mining

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

The idea behind Stratasys and Chester Mining 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.