Correlation Between Hologic and Sartorius Aktiengesellscha

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

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

Diversification Opportunities for Hologic and Sartorius Aktiengesellscha

0.18

Correlation Coefficient

Hologic  Sartorius Aktiengesellscha

Average diversification

The 3 months correlation between Hologic and Sartorius is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hologic and Sartorius Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Aktiengesellscha 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 are associated (or correlated) with Sartorius Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Aktiengesellscha has no effect on the direction of Hologic i.e., Hologic and Sartorius Aktiengesellscha go up and down completely randomly.

Pair Corralation between Hologic and Sartorius Aktiengesellscha

Assuming the 90 days horizon Hologic is expected to under-perform the Sartorius Aktiengesellscha. But the stock apears to be less risky and, when comparing its historical volatility, Hologic is 1.89 times less risky than Sartorius Aktiengesellscha. The stock trades about -0.47 of its potential returns per unit of risk. The Sartorius Aktiengesellschaft is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  21,110  in Sartorius Aktiengesellschaft on September 24, 2024 and sell it today you would earn a total of  450.00  from holding Sartorius Aktiengesellschaft or generate 2.13% return on investment over 90 days.

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

Hologic  vs.  Sartorius Aktiengesellschaft

Hologic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hologic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hologic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sartorius Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hologic and Sartorius Aktiengesellscha

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

The idea behind Hologic and Sartorius Aktiengesellschaft 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.