Correlation Between Stratasys and AstroNova
Can any of the company-specific risk be diversified away by investing in both Stratasys and AstroNova 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 AstroNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stratasys and AstroNova, you can compare the effects of market volatilities on Stratasys and AstroNova 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 AstroNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stratasys and AstroNova.
Diversification Opportunities for Stratasys and AstroNova
Poor diversification
The 1 month correlation between Stratasys and AstroNova is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and AstroNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstroNova 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 AstroNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstroNova has no effect on the direction of Stratasys i.e., Stratasys and AstroNova go up and down completely randomly.
Pair Corralation between Stratasys and AstroNova
Given the investment horizon of 90 days Stratasys is expected to under-perform the AstroNova. In addition to that, Stratasys is 1.47 times more volatile than AstroNova. It trades about -0.03 of its total potential returns per unit of risk. AstroNova is currently generating about 0.04 per unit of volatility. If you would invest 1,290 in AstroNova on January 26, 2024 and sell it today you would earn a total of 454.00 from holding AstroNova or generate 35.19% return on investment over 90 days.
| Time Period | 1 Month [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Stratasys vs. AstroNova
Performance |
| Timeline |
| Stratasys |
| AstroNova |
Stratasys and AstroNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stratasys and AstroNova
The main advantage of trading using opposite Stratasys and AstroNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stratasys position performs unexpectedly, AstroNova 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 AstroNova will offset losses from the drop in AstroNova's long position.| Stratasys vs. LG Display Co | Stratasys vs. Sony Corp | Stratasys vs. Sonos Inc | Stratasys vs. Vizio Holding Corp |
| AstroNova vs. LG Display Co | AstroNova vs. Sony Corp | AstroNova vs. Sonos Inc | AstroNova vs. Vizio Holding Corp |
Check out your portfolio center.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.
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