Correlation Between HOLOGIC and Stratasys

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

By analyzing existing cross correlation between HOLOGIC INC 325 and Stratasys, you can compare the effects of market volatilities on HOLOGIC 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 HOLOGIC with a short position of Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOLOGIC and Stratasys.

Diversification Opportunities for HOLOGIC and Stratasys

-0.55

Correlation Coefficient

HOLOGIC  Stratasys

Excellent diversification

The 3 months correlation between HOLOGIC and Stratasys is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HOLOGIC INC 325 and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys and HOLOGIC 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 HOLOGIC INC 325 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 HOLOGIC i.e., HOLOGIC and Stratasys go up and down completely randomly.

Pair Corralation between HOLOGIC and Stratasys

Assuming the 90 days trading horizon HOLOGIC INC 325 is expected to under-perform the Stratasys. But the bond apears to be less risky and, when comparing its historical volatility, HOLOGIC INC 325 is 8.13 times less risky than Stratasys. The bond trades about -0.2 of its potential returns per unit of risk. The Stratasys is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  763.00  in Stratasys on September 25, 2024 and sell it today you would earn a total of  176.00  from holding Stratasys or generate 23.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

HOLOGIC INC 325  vs.  Stratasys

HOLOGIC INC 325

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HOLOGIC INC 325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HOLOGIC INC 325 investors.

Stratasys

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Stratasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HOLOGIC and Stratasys

The main advantage of trading using opposite HOLOGIC and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOLOGIC 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 HOLOGIC INC 325 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.