Correlation Between Stratasys and Equinix
Can any of the company-specific risk be diversified away by investing in both Stratasys and Equinix 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 Equinix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stratasys and Equinix, you can compare the effects of market volatilities on Stratasys and Equinix 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 Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stratasys and Equinix.
Diversification Opportunities for Stratasys and Equinix
Poor diversification
The 3 months correlation between Stratasys and Equinix is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix 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 Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Stratasys i.e., Stratasys and Equinix go up and down completely randomly.
Pair Corralation between Stratasys and Equinix
Given the investment horizon of 90 days Stratasys is expected to generate 4.8 times more return on investment than Equinix. However, Stratasys is 4.8 times more volatile than Equinix. It trades about 0.27 of its potential returns per unit of risk. Equinix is currently generating about 0.37 per unit of risk. If you would invest 713.00 in Stratasys on September 3, 2024 and sell it today you would earn a total of 249.00 from holding Stratasys or generate 34.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stratasys vs. Equinix
Performance |
| Timeline |
| Stratasys |
| Equinix |
Stratasys and Equinix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stratasys and Equinix
The main advantage of trading using opposite Stratasys and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stratasys position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.| Stratasys vs. Nano Dimension | Stratasys vs. IONQ Inc | Stratasys vs. D Wave Quantum | Stratasys vs. Desktop Metal |
| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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