Correlation Between Stratasys and Killbuck Bancshares

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

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

Diversification Opportunities for Stratasys and Killbuck Bancshares

0.4

Correlation Coefficient

Stratasys  Killbuck Bancshares

Very weak diversification

The 3 months correlation between Stratasys and Killbuck is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Killbuck Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Killbuck Bancshares 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 Killbuck Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Killbuck Bancshares has no effect on the direction of Stratasys i.e., Stratasys and Killbuck Bancshares go up and down completely randomly.

Pair Corralation between Stratasys and Killbuck Bancshares

Given the investment horizon of 90 days Stratasys is expected to generate 1.84 times more return on investment than Killbuck Bancshares. However, Stratasys is 1.84 times more volatile than Killbuck Bancshares. It trades about -0.15 of its potential returns per unit of risk. Killbuck Bancshares is currently generating about -0.32 per unit of risk. If you would invest  1,131  in Stratasys on December 4, 2024 and sell it today you would lose (116.00) from holding Stratasys or give up 10.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Stratasys  vs.  Killbuck Bancshares

Stratasys

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Stratasys may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Killbuck Bancshares

Risk-Adjusted Performance

Modest

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

Pair Trading with Stratasys and Killbuck Bancshares

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

The idea behind Stratasys and Killbuck Bancshares 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.