Correlation Between HOYA and Sartorius Aktiengesellscha

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

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

Diversification Opportunities for HOYA and Sartorius Aktiengesellscha

-0.24

Correlation Coefficient

HOYA  Sartorius Aktiengesellscha

Very good diversification

The 3 months correlation between HOYA and Sartorius is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding HOYA Corp. and Sartorius Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Aktiengesellscha and HOYA 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 HOYA Corporation 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 HOYA i.e., HOYA and Sartorius Aktiengesellscha go up and down completely randomly.

Pair Corralation between HOYA and Sartorius Aktiengesellscha

Assuming the 90 days horizon HOYA Corporation is expected to generate 2.13 times more return on investment than Sartorius Aktiengesellscha. However, HOYA is 2.13 times more volatile than Sartorius Aktiengesellschaft. It trades about 0.13 of its potential returns per unit of risk. Sartorius Aktiengesellschaft is currently generating about -0.02 per unit of risk. If you would invest  7,919  in HOYA Corporation on September 12, 2024 and sell it today you would earn a total of  4,766  from holding HOYA Corporation or generate 60.18% return on investment over 90 days.

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

HOYA Corp.  vs.  Sartorius Aktiengesellschaft

HOYA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HOYA Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HOYA reported solid returns over the last few months and may actually be approaching a breakup point.

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 HOYA and Sartorius Aktiengesellscha

The main advantage of trading using opposite HOYA and Sartorius Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOYA 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 HOYA Corporation 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.