Correlation Between Stratasys and Socket Mobile
Can any of the company-specific risk be diversified away by investing in both Stratasys and Socket Mobile 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 Socket Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stratasys and Socket Mobile, you can compare the effects of market volatilities on Stratasys and Socket Mobile 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 Socket Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stratasys and Socket Mobile.
Diversification Opportunities for Stratasys and Socket Mobile
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stratasys and Socket is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Socket Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socket Mobile 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 Socket Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socket Mobile has no effect on the direction of Stratasys i.e., Stratasys and Socket Mobile go up and down completely randomly.
Pair Corralation between Stratasys and Socket Mobile
Given the investment horizon of 90 days Stratasys is expected to under-perform the Socket Mobile. In addition to that, Stratasys is 1.04 times more volatile than Socket Mobile. It trades about -0.1 of its total potential returns per unit of risk. Socket Mobile is currently generating about -0.04 per unit of volatility. If you would invest 148.00 in Socket Mobile on January 24, 2024 and sell it today you would lose (39.00) from holding Socket Mobile or give up 26.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stratasys vs. Socket Mobile
Performance |
| Timeline |
| Stratasys |
| Socket Mobile |
Stratasys and Socket Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stratasys and Socket Mobile
The main advantage of trading using opposite Stratasys and Socket Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stratasys position performs unexpectedly, Socket Mobile 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 Socket Mobile will offset losses from the drop in Socket Mobile's long position.| Stratasys vs. LG Display Co | Stratasys vs. Sony Corp | Stratasys vs. Sonos Inc | Stratasys vs. Vizio Holding Corp |
| Socket Mobile vs. LG Display Co | Socket Mobile vs. Sony Corp | Socket Mobile vs. Sonos Inc | Socket Mobile 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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