Correlation Between Sartorius Stedim and Xaar Plc

Can any of the company-specific risk be diversified away by investing in both Sartorius Stedim and Xaar Plc 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 Xaar Plc 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 Xaar plc, you can compare the effects of market volatilities on Sartorius Stedim and Xaar Plc 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 Xaar Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sartorius Stedim and Xaar Plc.

Diversification Opportunities for Sartorius Stedim and Xaar Plc

0.18

Correlation Coefficient

Sartorius Stedim  Xaar Plc

Average diversification

The 3 months correlation between Sartorius and Xaar is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Stedim Biotech and Xaar plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xaar plc 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 Xaar Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xaar plc has no effect on the direction of Sartorius Stedim i.e., Sartorius Stedim and Xaar Plc go up and down completely randomly.

Pair Corralation between Sartorius Stedim and Xaar Plc

Assuming the 90 days trading horizon Sartorius Stedim Biotech is expected to generate 0.51 times more return on investment than Xaar Plc. However, Sartorius Stedim Biotech is 1.97 times less risky than Xaar Plc. It trades about 0.04 of its potential returns per unit of risk. Xaar plc is currently generating about -0.02 per unit of risk. If you would invest  19,383  in Sartorius Stedim Biotech on October 24, 2024 and sell it today you would earn a total of  922.00  from holding Sartorius Stedim Biotech or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Sartorius Stedim Biotech  vs.  Xaar plc

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.

Xaar plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sartorius Stedim and Xaar Plc

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

The idea behind Sartorius Stedim Biotech and Xaar plc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.