Correlation Between Sharps Technology and Straumann Holding

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

By analyzing existing cross correlation between Sharps Technology and Straumann Holding AG, you can compare the effects of market volatilities on Sharps Technology and Straumann Holding 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 Sharps Technology with a short position of Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sharps Technology and Straumann Holding.

Diversification Opportunities for Sharps Technology and Straumann Holding

0.24

Correlation Coefficient

Sharps Technology  Straumann Holding

Modest diversification

The 3 months correlation between Sharps and Straumann is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Sharps Technology 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 Sharps Technology are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Sharps Technology i.e., Sharps Technology and Straumann Holding go up and down completely randomly.

Pair Corralation between Sharps Technology and Straumann Holding

Given the investment horizon of 90 days Sharps Technology is expected to under-perform the Straumann Holding. In addition to that, Sharps Technology is 6.47 times more volatile than Straumann Holding AG. It trades about -0.08 of its total potential returns per unit of risk. Straumann Holding AG is currently generating about 0.1 per unit of volatility. If you would invest  1,288  in Straumann Holding AG on September 12, 2024 and sell it today you would earn a total of  41.00  from holding Straumann Holding AG or generate 3.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Sharps Technology  vs.  Straumann Holding AG

Sharps Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Straumann Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Straumann Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Straumann Holding is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sharps Technology and Straumann Holding

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

The idea behind Sharps Technology and Straumann Holding AG 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.