Correlation Between Stratasys and Quantum Computing

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

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

Diversification Opportunities for Stratasys and Quantum Computing

0.79

Correlation Coefficient

Stratasys  Quantum Computing

Poor diversification

The 3 months correlation between Stratasys and Quantum is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and Quantum Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Computing 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 Quantum Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Computing has no effect on the direction of Stratasys i.e., Stratasys and Quantum Computing go up and down completely randomly.

Pair Corralation between Stratasys and Quantum Computing

Given the investment horizon of 90 days Stratasys is expected to generate 8.56 times less return on investment than Quantum Computing. But when comparing it to its historical volatility, Stratasys is 4.05 times less risky than Quantum Computing. It trades about 0.13 of its potential returns per unit of risk. Quantum Computing is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Quantum Computing on August 31, 2024 and sell it today you would earn a total of  612.00  from holding Quantum Computing or generate 971.43% return on investment over 90 days.

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

Stratasys  vs.  Quantum Computing

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.

Quantum Computing

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum Computing are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Quantum Computing unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stratasys and Quantum Computing

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

The idea behind Stratasys and Quantum Computing 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.