Correlation Between Sidetrade and Straumann Holding

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

By analyzing existing cross correlation between Sidetrade and Straumann Holding AG, you can compare the effects of market volatilities on Sidetrade and Straumann Holding 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 Sidetrade with a short position of Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidetrade and Straumann Holding.

Diversification Opportunities for Sidetrade and Straumann Holding

0.78

Correlation Coefficient

Sidetrade  Straumann Holding

Poor diversification

The 3 months correlation between Sidetrade and Straumann is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sidetrade and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Sidetrade 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 Sidetrade are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Sidetrade i.e., Sidetrade and Straumann Holding go up and down completely randomly.

Pair Corralation between Sidetrade and Straumann Holding

Assuming the 90 days trading horizon Sidetrade is expected to generate 1.3 times more return on investment than Straumann Holding. However, Sidetrade is 1.3 times more volatile than Straumann Holding AG. It trades about 0.14 of its potential returns per unit of risk. Straumann Holding AG is currently generating about 0.07 per unit of risk. If you would invest  22,800  in Sidetrade on December 1, 2024 and sell it today you would earn a total of  4,000  from holding Sidetrade or generate 17.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.16%
Values	Daily Returns

Sidetrade  vs.  Straumann Holding AG

Sidetrade

Risk-Adjusted Performance

OK

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

Straumann Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Straumann Holding AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Straumann Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sidetrade and Straumann Holding

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

The idea behind Sidetrade and Straumann Holding AG 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.