Correlation Between AptarGroup and Straumann Holding

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

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

Diversification Opportunities for AptarGroup and Straumann Holding

-0.59

Correlation Coefficient

AptarGroup  Straumann Holding

Excellent diversification

The 3 months correlation between AptarGroup and Straumann is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and AptarGroup 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 AptarGroup 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 AptarGroup i.e., AptarGroup and Straumann Holding go up and down completely randomly.

Pair Corralation between AptarGroup and Straumann Holding

Considering the 90-day investment horizon AptarGroup is expected to under-perform the Straumann Holding. But the stock apears to be less risky and, when comparing its historical volatility, AptarGroup is 1.42 times less risky than Straumann Holding. The stock trades about -0.13 of its potential returns per unit of risk. The Straumann Holding AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,288  in Straumann Holding AG on September 11, 2024 and sell it today you would earn a total of  35.00  from holding Straumann Holding AG or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AptarGroup  vs.  Straumann Holding AG

AptarGroup

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, AptarGroup reported solid returns over the last few months and may actually be approaching a breakup point.

Straumann Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Straumann Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Straumann Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AptarGroup and Straumann Holding

The main advantage of trading using opposite AptarGroup and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptarGroup 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 AptarGroup 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 CEOs Directory module to screen CEOs from public companies around the world.