Correlation Between Stratasys and Chemours
Can any of the company-specific risk be diversified away by investing in both Stratasys and Chemours 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 Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stratasys and Chemours Co, you can compare the effects of market volatilities on Stratasys and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stratasys and Chemours.
Diversification Opportunities for Stratasys and Chemours
Poor diversification
The 3 months correlation between Stratasys and Chemours is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Stratasys i.e., Stratasys and Chemours go up and down completely randomly.
Pair Corralation between Stratasys and Chemours
Given the investment horizon of 90 days Stratasys is expected to generate 1.47 times more return on investment than Chemours. However, Stratasys is 1.47 times more volatile than Chemours Co. It trades about 0.24 of its potential returns per unit of risk. Chemours Co is currently generating about 0.26 per unit of risk. If you would invest 733.00 in Stratasys on September 2, 2024 and sell it today you would earn a total of 229.00 from holding Stratasys or generate 31.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stratasys vs. Chemours Co
Performance |
| Timeline |
| Stratasys |
| Chemours |
Stratasys and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stratasys and Chemours
The main advantage of trading using opposite Stratasys and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stratasys position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| Stratasys vs. Nano Dimension | Stratasys vs. IONQ Inc | Stratasys vs. D Wave Quantum | Stratasys vs. Desktop Metal |
| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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