Correlation Between Stratasys and Neogen

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

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

Diversification Opportunities for Stratasys and Neogen

-0.42

Correlation Coefficient

Stratasys  Neogen

Very good diversification

The 3 months correlation between Stratasys and Neogen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Stratasys i.e., Stratasys and Neogen go up and down completely randomly.

Pair Corralation between Stratasys and Neogen

Given the investment horizon of 90 days Stratasys is expected to under-perform the Neogen. In addition to that, Stratasys is 1.26 times more volatile than Neogen. It trades about -0.19 of its total potential returns per unit of risk. Neogen is currently generating about -0.01 per unit of volatility. If you would invest  1,317  in Neogen on October 11, 2024 and sell it today you would lose (10.00) from holding Neogen or give up 0.76% of portfolio value over 90 days.

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

Stratasys  vs.  Neogen

Stratasys

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 7 (%) 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.

Neogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Stratasys and Neogen

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

The idea behind Stratasys and Neogen 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.