Correlation Between 3D Systems and Logitech International

Can any of the company-specific risk be diversified away by investing in both 3D Systems and Logitech International 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 Logitech International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3D Systems and Logitech International SA, you can compare the effects of market volatilities on 3D Systems and Logitech International 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 Logitech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3D Systems and Logitech International.

Diversification Opportunities for 3D Systems and Logitech International

-0.3

Correlation Coefficient

3D Systems  Logitech International

Very good diversification

The 3 months correlation between DDD and Logitech is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems and Logitech International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logitech International 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 Logitech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logitech International has no effect on the direction of 3D Systems i.e., 3D Systems and Logitech International go up and down completely randomly.

Pair Corralation between 3D Systems and Logitech International

Considering the 90-day investment horizon 3D Systems is expected to under-perform the Logitech International. In addition to that, 3D Systems is 3.04 times more volatile than Logitech International SA. It trades about -0.06 of its total potential returns per unit of risk. Logitech International SA is currently generating about -0.07 per unit of volatility. If you would invest  8,352  in Logitech International SA on September 3, 2024 and sell it today you would lose (263.00) from holding Logitech International SA or give up 3.15% of portfolio value over 90 days.

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

3D Systems  vs.  Logitech International SA

3D Systems

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 3D Systems are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, 3D Systems exhibited solid returns over the last few months and may actually be approaching a breakup point.

Logitech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Logitech International SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Logitech International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with 3D Systems and Logitech International

The main advantage of trading using opposite 3D Systems and Logitech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3D Systems position performs unexpectedly, Logitech International 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 Logitech International will offset losses from the drop in Logitech International's long position.

The idea behind 3D Systems and Logitech International SA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.