Correlation Between Stratasys and STRC Old

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

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

Diversification Opportunities for Stratasys and STRC Old

0.0

Correlation Coefficient

Stratasys  STRC Old

Pay attention - limited upside

The 3 months correlation between Stratasys and STRC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and STRC Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRC Old 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 STRC Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRC Old has no effect on the direction of Stratasys i.e., Stratasys and STRC Old go up and down completely randomly.

Pair Corralation between Stratasys and STRC Old

If you would invest  888.00  in Stratasys on December 29, 2024 and sell it today you would earn a total of  124.00  from holding Stratasys or generate 13.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Stratasys  vs.  STRC Old

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.

STRC Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days STRC Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, STRC Old is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Stratasys and STRC Old

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

The idea behind Stratasys and STRC Old 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.