Correlation Between Sartorius Stedim and American Homes
Can any of the company-specific risk be diversified away by investing in both Sartorius Stedim and American Homes 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 American Homes 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 American Homes 4, you can compare the effects of market volatilities on Sartorius Stedim and American Homes 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 American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sartorius Stedim and American Homes.
Diversification Opportunities for Sartorius Stedim and American Homes
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sartorius and American is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Stedim Biotech and American Homes 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Homes 4 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 American Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Homes 4 has no effect on the direction of Sartorius Stedim i.e., Sartorius Stedim and American Homes go up and down completely randomly.
Pair Corralation between Sartorius Stedim and American Homes
Assuming the 90 days trading horizon Sartorius Stedim Biotech is expected to under-perform the American Homes. In addition to that, Sartorius Stedim is 1.67 times more volatile than American Homes 4. It trades about -0.01 of its total potential returns per unit of risk. American Homes 4 is currently generating about 0.02 per unit of volatility. If you would invest 3,159 in American Homes 4 on October 27, 2024 and sell it today you would earn a total of 141.00 from holding American Homes 4 or generate 4.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sartorius Stedim Biotech vs. American Homes 4
Performance |
Timeline |
Sartorius Stedim Biotech |
American Homes 4 |
Sartorius Stedim and American Homes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sartorius Stedim and American Homes
The main advantage of trading using opposite Sartorius Stedim and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sartorius Stedim position performs unexpectedly, American Homes 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 American Homes will offset losses from the drop in American Homes' long position.Sartorius Stedim vs. Tradegate AG Wertpapierhandelsbank | ||
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Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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