Correlation Between Stratasys and Cenovus

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

By analyzing existing cross correlation between Stratasys and Cenovus Energy 525, you can compare the effects of market volatilities on Stratasys and Cenovus 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 Cenovus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stratasys and Cenovus.

Diversification Opportunities for Stratasys and Cenovus

-0.5

Correlation Coefficient

Stratasys  Cenovus

Very good diversification

The 3 months correlation between Stratasys and Cenovus is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Cenovus Energy 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenovus Energy 525 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 Cenovus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenovus Energy 525 has no effect on the direction of Stratasys i.e., Stratasys and Cenovus go up and down completely randomly.

Pair Corralation between Stratasys and Cenovus

Given the investment horizon of 90 days Stratasys is expected to generate 3.4 times more return on investment than Cenovus. However, Stratasys is 3.4 times more volatile than Cenovus Energy 525. It trades about 0.1 of its potential returns per unit of risk. Cenovus Energy 525 is currently generating about 0.03 per unit of risk. If you would invest  730.00  in Stratasys on October 10, 2024 and sell it today you would earn a total of  189.00  from holding Stratasys or generate 25.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.77%
Values	Daily Returns

Stratasys  vs.  Cenovus Energy 525

Stratasys

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 8 (%) 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.

Cenovus Energy 525

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cenovus Energy 525 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Cenovus is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stratasys and Cenovus

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

The idea behind Stratasys and Cenovus Energy 525 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.