Correlation Between Stratasys and Strong Global

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

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

Diversification Opportunities for Stratasys and Strong Global

-0.42

Correlation Coefficient

Stratasys  Strong Global

Very good diversification

The 3 months correlation between Stratasys and Strong is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Strong Global Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strong Global Entert 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 Strong Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strong Global Entert has no effect on the direction of Stratasys i.e., Stratasys and Strong Global go up and down completely randomly.

Pair Corralation between Stratasys and Strong Global

Given the investment horizon of 90 days Stratasys is expected to under-perform the Strong Global. But the stock apears to be less risky and, when comparing its historical volatility, Stratasys is 16.33 times less risky than Strong Global. The stock trades about -0.19 of its potential returns per unit of risk. The Strong Global Entertainment is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  130.00  in Strong Global Entertainment on February 23, 2024 and sell it today you would earn a total of  23.00  from holding Strong Global Entertainment or generate 17.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Stratasys  vs.  Strong Global Entertainment

Stratasys

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Strong Global Entert

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Strong Global Entertainment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Strong Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stratasys and Strong Global

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

The idea behind Stratasys and Strong Global Entertainment 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.