Correlation Between Bath Body and Sartorius Stedim

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

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

Diversification Opportunities for Bath Body and Sartorius Stedim

-0.04

Correlation Coefficient

Bath Body  Sartorius Stedim

Good diversification

The 3 months correlation between Bath and Sartorius is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bath Body Works 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 Bath Body 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 Bath Body Works 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 Bath Body i.e., Bath Body and Sartorius Stedim go up and down completely randomly.

Pair Corralation between Bath Body and Sartorius Stedim

Assuming the 90 days trading horizon Bath Body Works is expected to under-perform the Sartorius Stedim. In addition to that, Bath Body is 1.32 times more volatile than Sartorius Stedim Biotech. It trades about -0.11 of its total potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about -0.03 per unit of volatility. If you would invest  18,255  in Sartorius Stedim Biotech on October 8, 2024 and sell it today you would lose (225.00) from holding Sartorius Stedim Biotech or give up 1.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Bath Body Works  vs.  Sartorius Stedim Biotech

Bath Body Works

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bath Body Works are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bath Body unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sartorius Stedim Biotech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sartorius Stedim is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bath Body and Sartorius Stedim

The main advantage of trading using opposite Bath Body and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bath Body 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 Bath Body Works 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.