Correlation Between Sartorius Stedim and 21Shares Polkadot

Can any of the company-specific risk be diversified away by investing in both Sartorius Stedim and 21Shares Polkadot 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 Sartorius Stedim and 21Shares Polkadot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sartorius Stedim Biotech and 21Shares Polkadot ETP, you can compare the effects of market volatilities on Sartorius Stedim and 21Shares Polkadot 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 Sartorius Stedim with a short position of 21Shares Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sartorius Stedim and 21Shares Polkadot.

Diversification Opportunities for Sartorius Stedim and 21Shares Polkadot

-0.27

Correlation Coefficient

Sartorius Stedim  21Shares Polkadot

Very good diversification

The 3 months correlation between Sartorius and 21Shares is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Stedim Biotech and 21Shares Polkadot ETP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Polkadot ETP and Sartorius Stedim 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 Sartorius Stedim Biotech are associated (or correlated) with 21Shares Polkadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Polkadot ETP has no effect on the direction of Sartorius Stedim i.e., Sartorius Stedim and 21Shares Polkadot go up and down completely randomly.

Pair Corralation between Sartorius Stedim and 21Shares Polkadot

Assuming the 90 days trading horizon Sartorius Stedim is expected to generate 11.85 times less return on investment than 21Shares Polkadot. But when comparing it to its historical volatility, Sartorius Stedim Biotech is 1.9 times less risky than 21Shares Polkadot. It trades about 0.03 of its potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  189.00  in 21Shares Polkadot ETP on August 31, 2024 and sell it today you would earn a total of  195.00  from holding 21Shares Polkadot ETP or generate 103.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Sartorius Stedim Biotech  vs.  21Shares Polkadot ETP

Sartorius Stedim Biotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Sartorius Stedim may actually be approaching a critical reversion point that can send shares even higher in December 2024.

21Shares Polkadot ETP

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Polkadot ETP are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 21Shares Polkadot sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sartorius Stedim and 21Shares Polkadot

The main advantage of trading using opposite Sartorius Stedim and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sartorius Stedim position performs unexpectedly, 21Shares Polkadot 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 21Shares Polkadot will offset losses from the drop in 21Shares Polkadot's long position.

The idea behind Sartorius Stedim Biotech and 21Shares Polkadot ETP 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.