Correlation Between Stratasys and HP

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

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

Diversification Opportunities for Stratasys and HP

0.11

Correlation Coefficient

Stratasys  HP

Average diversification

The 3 months correlation between Stratasys and HP is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc 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 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 Stratasys i.e., Stratasys and HP go up and down completely randomly.

Pair Corralation between Stratasys and HP

Given the investment horizon of 90 days Stratasys is expected to generate 2.44 times more return on investment than HP. However, Stratasys is 2.44 times more volatile than HP Inc. It trades about 0.07 of its potential returns per unit of risk. HP Inc is currently generating about -0.11 per unit of risk. If you would invest  888.00  in Stratasys on December 28, 2024 and sell it today you would earn a total of  127.00  from holding Stratasys or generate 14.3% return on investment over 90 days.

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

Stratasys  vs.  HP Inc

Stratasys

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 5 (%) 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.

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 latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Stratasys and HP

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