Correlation Between Alan Allman and Sartorius Stedim

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

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

Diversification Opportunities for Alan Allman and Sartorius Stedim

0.37

Correlation Coefficient

Alan Allman  Sartorius Stedim

Weak diversification

The 3 months correlation between Alan and Sartorius is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Alan Allman Associates 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 Alan Allman 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 Alan Allman Associates 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 Alan Allman i.e., Alan Allman and Sartorius Stedim go up and down completely randomly.

Pair Corralation between Alan Allman and Sartorius Stedim

Assuming the 90 days trading horizon Alan Allman Associates is expected to generate 5.0 times more return on investment than Sartorius Stedim. However, Alan Allman is 5.0 times more volatile than Sartorius Stedim Biotech. It trades about 0.45 of its potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about 0.09 per unit of risk. If you would invest  346.00  in Alan Allman Associates on October 11, 2024 and sell it today you would earn a total of  414.00  from holding Alan Allman Associates or generate 119.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Alan Allman Associates  vs.  Sartorius Stedim Biotech

Alan Allman Associates

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alan Allman Associates are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Alan Allman sustained solid returns over the last few months and may actually be approaching a breakup point.

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. Despite somewhat weak primary indicators, Sartorius Stedim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Alan Allman and Sartorius Stedim

The main advantage of trading using opposite Alan Allman and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alan Allman 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 Alan Allman Associates 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.