Correlation Between Stratasys and ChampionX

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

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

Diversification Opportunities for Stratasys and ChampionX

-0.03

Correlation Coefficient

Stratasys  ChampionX

Good diversification

The 3 months correlation between Stratasys and ChampionX is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Stratasys i.e., Stratasys and ChampionX go up and down completely randomly.

Pair Corralation between Stratasys and ChampionX

Given the investment horizon of 90 days Stratasys is expected to generate 2.23 times more return on investment than ChampionX. However, Stratasys is 2.23 times more volatile than ChampionX. It trades about 0.14 of its potential returns per unit of risk. ChampionX is currently generating about -0.03 per unit of risk. If you would invest  736.00  in Stratasys on September 18, 2024 and sell it today you would earn a total of  288.00  from holding Stratasys or generate 39.13% return on investment over 90 days.

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

Stratasys  vs.  ChampionX

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 inconsistent basic indicators, Stratasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

ChampionX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, ChampionX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stratasys and ChampionX

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

The idea behind Stratasys and ChampionX 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.