Correlation Between Sartorius Stedim and Entech SE

Can any of the company-specific risk be diversified away by investing in both Sartorius Stedim and Entech SE 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 Entech SE 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 Entech SE SAS, you can compare the effects of market volatilities on Sartorius Stedim and Entech SE 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 Entech SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sartorius Stedim and Entech SE.

Diversification Opportunities for Sartorius Stedim and Entech SE

0.34

Correlation Coefficient

Sartorius Stedim  Entech SE

Weak diversification

The 3 months correlation between Sartorius and Entech is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Stedim Biotech and Entech SE SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entech SE SAS 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 Entech SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entech SE SAS has no effect on the direction of Sartorius Stedim i.e., Sartorius Stedim and Entech SE go up and down completely randomly.

Pair Corralation between Sartorius Stedim and Entech SE

Assuming the 90 days trading horizon Sartorius Stedim is expected to generate 8.56 times less return on investment than Entech SE. But when comparing it to its historical volatility, Sartorius Stedim Biotech is 2.66 times less risky than Entech SE. It trades about 0.07 of its potential returns per unit of risk. Entech SE SAS is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  480.00  in Entech SE SAS on September 28, 2024 and sell it today you would earn a total of  110.00  from holding Entech SE SAS or generate 22.92% return on investment over 90 days.

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

Sartorius Stedim Biotech  vs.  Entech SE SAS

Sartorius Stedim Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sartorius Stedim Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Sartorius Stedim is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Entech SE SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entech SE SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Sartorius Stedim and Entech SE

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

The idea behind Sartorius Stedim Biotech and Entech SE SAS 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.