Correlation Between Sartorius Stedim and Spineguard

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

Diversification Opportunities for Sartorius Stedim and Spineguard

0.33

Correlation Coefficient

Sartorius Stedim  Spineguard

Weak diversification

The 3 months correlation between Sartorius and Spineguard is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Stedim Biotech and Spineguard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spineguard 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 Spineguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spineguard has no effect on the direction of Sartorius Stedim i.e., Sartorius Stedim and Spineguard go up and down completely randomly.

Pair Corralation between Sartorius Stedim and Spineguard

Assuming the 90 days trading horizon Sartorius Stedim is expected to generate 13.2 times less return on investment than Spineguard. But when comparing it to its historical volatility, Sartorius Stedim Biotech is 2.75 times less risky than Spineguard. It trades about 0.03 of its potential returns per unit of risk. Spineguard is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Spineguard on September 5, 2024 and sell it today you would earn a total of  9.00  from holding Spineguard or generate 64.29% return on investment over 90 days.

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

Sartorius Stedim Biotech  vs.  Spineguard

Sartorius Stedim Biotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Sartorius Stedim is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Spineguard

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Spineguard are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Spineguard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sartorius Stedim and Spineguard

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

The idea behind Sartorius Stedim Biotech and Spineguard 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.