Correlation Between Stratasys and Quantum

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

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

Diversification Opportunities for Stratasys and Quantum

0.14

Correlation Coefficient

Stratasys  Quantum

Average diversification

The 3 months correlation between Stratasys and Quantum is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Quantum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum 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 Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum has no effect on the direction of Stratasys i.e., Stratasys and Quantum go up and down completely randomly.

Pair Corralation between Stratasys and Quantum

Given the investment horizon of 90 days Stratasys is expected to generate 0.51 times more return on investment than Quantum. However, Stratasys is 1.97 times less risky than Quantum. It trades about 0.08 of its potential returns per unit of risk. Quantum is currently generating about 0.04 per unit of risk. If you would invest  784.00  in Stratasys on August 24, 2024 and sell it today you would earn a total of  155.00  from holding Stratasys or generate 19.77% return on investment over 90 days.

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

Stratasys  vs.  Quantum

Stratasys

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 6 (%) 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.

Quantum

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stratasys and Quantum

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

The idea behind Stratasys and Quantum 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.