Correlation Between Amer Bio and Sotera Health

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

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

Diversification Opportunities for Amer Bio and Sotera Health

0.14

Correlation Coefficient

Amer Bio  Sotera Health

Average diversification

The 3 months correlation between Amer and Sotera is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Amer Bio Medica and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and Amer Bio 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 Amer Bio Medica are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Amer Bio i.e., Amer Bio and Sotera Health go up and down completely randomly.

Pair Corralation between Amer Bio and Sotera Health

If you would invest  1.38  in Amer Bio Medica on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Amer Bio Medica or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Amer Bio Medica  vs.  Sotera Health Co

Amer Bio Medica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amer Bio Medica has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Amer Bio is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Sotera Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sotera Health Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Amer Bio and Sotera Health

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

The idea behind Amer Bio Medica and Sotera Health Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.