Correlation Between SARTORIUS and Sartorius Stedim

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

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

Diversification Opportunities for SARTORIUS and Sartorius Stedim

0.54

Correlation Coefficient

SARTORIUS  Sartorius Stedim

Very weak diversification

The 3 months correlation between SARTORIUS and Sartorius is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SARTORIUS AG UNSPADR and Sartorius Stedim Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Stedim Biotech and SARTORIUS 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 AG UNSPADR are associated (or correlated) with Sartorius Stedim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Stedim Biotech has no effect on the direction of SARTORIUS i.e., SARTORIUS and Sartorius Stedim go up and down completely randomly.

Pair Corralation between SARTORIUS and Sartorius Stedim

Assuming the 90 days trading horizon SARTORIUS AG UNSPADR is expected to under-perform the Sartorius Stedim. But the stock apears to be less risky and, when comparing its historical volatility, SARTORIUS AG UNSPADR is 1.05 times less risky than Sartorius Stedim. The stock trades about 0.0 of its potential returns per unit of risk. The Sartorius Stedim Biotech is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  17,195  in Sartorius Stedim Biotech on September 23, 2024 and sell it today you would earn a total of  1,135  from holding Sartorius Stedim Biotech or generate 6.6% return on investment over 90 days.

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

SARTORIUS AG UNSPADR  vs.  Sartorius Stedim Biotech

SARTORIUS AG UNSPADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sartorius Stedim Biotech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Sartorius Stedim may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SARTORIUS and Sartorius Stedim

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

The idea behind SARTORIUS AG UNSPADR and Sartorius Stedim Biotech 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.