Correlation Between Solventum Corp and Stratasys
Can any of the company-specific risk be diversified away by investing in both Solventum Corp and Stratasys 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 Solventum Corp and Stratasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solventum Corp and Stratasys, you can compare the effects of market volatilities on Solventum Corp and Stratasys 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 Solventum Corp with a short position of Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solventum Corp and Stratasys.
Diversification Opportunities for Solventum Corp and Stratasys
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Solventum and Stratasys is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Solventum Corp and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys and Solventum Corp 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 Solventum Corp are associated (or correlated) with Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of Solventum Corp i.e., Solventum Corp and Stratasys go up and down completely randomly.
Pair Corralation between Solventum Corp and Stratasys
Given the investment horizon of 90 days Solventum Corp is expected to under-perform the Stratasys. But the stock apears to be less risky and, when comparing its historical volatility, Solventum Corp is 1.5 times less risky than Stratasys. The stock trades about -0.02 of its potential returns per unit of risk. The Stratasys is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,246 in Stratasys on September 3, 2024 and sell it today you would lose (284.00) from holding Stratasys or give up 22.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 35.15% |
| Values | Daily Returns |
Solventum Corp vs. Stratasys
Performance |
| Timeline |
| Solventum Corp |
| Stratasys |
Solventum Corp and Stratasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solventum Corp and Stratasys
The main advantage of trading using opposite Solventum Corp and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solventum Corp position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.| Solventum Corp vs. Stratasys | Solventum Corp vs. Allient | Solventum Corp vs. Weibo Corp | Solventum Corp vs. Apogee Enterprises |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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