Correlation Between AstroNova and Stratasys

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

By analyzing existing cross correlation between AstroNova and Stratasys, you can compare the effects of market volatilities on AstroNova 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 AstroNova with a short position of Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstroNova and Stratasys.

Diversification Opportunities for AstroNova and Stratasys

0.07

Correlation Coefficient

AstroNova  Stratasys

Significant diversification

The 3 months correlation between AstroNova and Stratasys is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AstroNova and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys and AstroNova 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 AstroNova 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 AstroNova i.e., AstroNova and Stratasys go up and down completely randomly.

Pair Corralation between AstroNova and Stratasys

Given the investment horizon of 90 days AstroNova is expected to generate 9.44 times less return on investment than Stratasys. But when comparing it to its historical volatility, AstroNova is 1.76 times less risky than Stratasys. It trades about 0.02 of its potential returns per unit of risk. Stratasys is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  697.00  in Stratasys on August 31, 2024 and sell it today you would earn a total of  258.00  from holding Stratasys or generate 37.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AstroNova  vs.  Stratasys

AstroNova

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AstroNova are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AstroNova is not utilizing all of its potentials. The new stock price uproar, may contribute to short-horizon losses for the private investors.

Stratasys

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish basic indicators, Stratasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AstroNova and Stratasys

The main advantage of trading using opposite AstroNova and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstroNova 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.

The idea behind AstroNova and Stratasys 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.