Correlation Between Strategic Investments and Sartorius Stedim

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

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

Diversification Opportunities for Strategic Investments and Sartorius Stedim

0.18

Correlation Coefficient

Strategic Investments  Sartorius Stedim

Average diversification

The 3 months correlation between Strategic and Sartorius is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS 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 Strategic Investments 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 Strategic Investments AS 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 Strategic Investments i.e., Strategic Investments and Sartorius Stedim go up and down completely randomly.

Pair Corralation between Strategic Investments and Sartorius Stedim

Assuming the 90 days horizon Strategic Investments is expected to generate 1.14 times less return on investment than Sartorius Stedim. In addition to that, Strategic Investments is 1.35 times more volatile than Sartorius Stedim Biotech. It trades about 0.01 of its total potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about 0.01 per unit of volatility. If you would invest  20,087  in Sartorius Stedim Biotech on September 14, 2024 and sell it today you would lose (967.00) from holding Sartorius Stedim Biotech or give up 4.81% of portfolio value over 90 days.

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

Strategic Investments AS  vs.  Sartorius Stedim Biotech

Strategic Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategic Investments AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sartorius Stedim Biotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sartorius Stedim may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Strategic Investments and Sartorius Stedim

The main advantage of trading using opposite Strategic Investments and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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 Strategic Investments AS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.