Correlation Between Stratasys and 00108WAF7

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Stratasys and 00108WAF7 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 00108WAF7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stratasys and AEP TEX INC, you can compare the effects of market volatilities on Stratasys and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stratasys and 00108WAF7.

Diversification Opportunities for Stratasys and 00108WAF7

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Stratasys and 00108WAF7 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of Stratasys i.e., Stratasys and 00108WAF7 go up and down completely randomly.

Pair Corralation between Stratasys and 00108WAF7

Given the investment horizon of 90 days Stratasys is expected to under-perform the 00108WAF7. But the stock apears to be less risky and, when comparing its historical volatility, Stratasys is 1.3 times less risky than 00108WAF7. The stock trades about -0.21 of its potential returns per unit of risk. The AEP TEX INC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,345  in AEP TEX INC on January 20, 2024 and sell it today you would earn a total of  876.00  from holding AEP TEX INC or generate 11.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy64.29%
ValuesDaily Returns

Stratasys  vs.  AEP TEX INC

 Performance 
       Timeline  
Stratasys 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Stratasys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
AEP TEX INC 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AEP TEX INC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 00108WAF7 sustained solid returns over the last few months and may actually be approaching a breakup point.

Stratasys and 00108WAF7 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stratasys and 00108WAF7

The main advantage of trading using opposite Stratasys and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stratasys position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.
The idea behind Stratasys and AEP TEX INC 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.
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Bonds Directory
Find actively traded corporate debentures issued by US companies
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity