Correlation Between Sartorius Stedim and GreenX Metals

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

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

Diversification Opportunities for Sartorius Stedim and GreenX Metals

0.34

Correlation Coefficient

Sartorius Stedim  GreenX Metals

Weak diversification

The 3 months correlation between Sartorius and GreenX is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Stedim Biotech and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Sartorius Stedim 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 Stedim Biotech are associated (or correlated) with GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Sartorius Stedim i.e., Sartorius Stedim and GreenX Metals go up and down completely randomly.

Pair Corralation between Sartorius Stedim and GreenX Metals

Assuming the 90 days trading horizon Sartorius Stedim Biotech is expected to under-perform the GreenX Metals. In addition to that, Sartorius Stedim is 1.01 times more volatile than GreenX Metals. It trades about -0.02 of its total potential returns per unit of risk. GreenX Metals is currently generating about 0.0 per unit of volatility. If you would invest  4,400  in GreenX Metals on October 24, 2024 and sell it today you would lose (550.00) from holding GreenX Metals or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Sartorius Stedim Biotech  vs.  GreenX Metals

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. In spite of comparatively uncertain basic indicators, Sartorius Stedim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GreenX Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GreenX Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, GreenX Metals is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sartorius Stedim and GreenX Metals

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

The idea behind Sartorius Stedim Biotech and GreenX Metals 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.