Correlation Between 3D Systems and Legend Holdings
Can any of the company-specific risk be diversified away by investing in both 3D Systems and Legend Holdings 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 3D Systems and Legend Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3D Systems and Legend Holdings, you can compare the effects of market volatilities on 3D Systems and Legend Holdings 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 3D Systems with a short position of Legend Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3D Systems and Legend Holdings.
Diversification Opportunities for 3D Systems and Legend Holdings
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SYV and Legend is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems and Legend Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legend Holdings and 3D Systems 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 3D Systems are associated (or correlated) with Legend Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legend Holdings has no effect on the direction of 3D Systems i.e., 3D Systems and Legend Holdings go up and down completely randomly.
Pair Corralation between 3D Systems and Legend Holdings
Assuming the 90 days horizon 3D Systems is expected to generate 2.57 times more return on investment than Legend Holdings. However, 3D Systems is 2.57 times more volatile than Legend Holdings. It trades about 0.0 of its potential returns per unit of risk. Legend Holdings is currently generating about -0.08 per unit of risk. If you would invest 295.00 in 3D Systems on August 31, 2024 and sell it today you would lose (17.00) from holding 3D Systems or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
3D Systems vs. Legend Holdings
Performance |
| Timeline |
| 3D Systems |
| Legend Holdings |
3D Systems and Legend Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3D Systems and Legend Holdings
The main advantage of trading using opposite 3D Systems and Legend Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3D Systems position performs unexpectedly, Legend Holdings 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 Legend Holdings will offset losses from the drop in Legend Holdings' long position.| 3D Systems vs. Arista Networks | 3D Systems vs. Seiko Epson | 3D Systems vs. Acer Incorporated | 3D Systems vs. Toshiba Tec |
| Legend Holdings vs. Arista Networks | Legend Holdings vs. Seiko Epson | Legend Holdings vs. Acer Incorporated | Legend Holdings vs. Toshiba Tec |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |