Correlation Between Sartorius Stedim and Exail Technologies

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

Diversification Opportunities for Sartorius Stedim and Exail Technologies

-0.33

Correlation Coefficient

Sartorius Stedim  Exail Technologies

Very good diversification

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

Pair Corralation between Sartorius Stedim and Exail Technologies

Assuming the 90 days trading horizon Sartorius Stedim is expected to generate 53.3 times less return on investment than Exail Technologies. But when comparing it to its historical volatility, Sartorius Stedim Biotech is 1.81 times less risky than Exail Technologies. It trades about 0.01 of its potential returns per unit of risk. Exail Technologies SA is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  1,740  in Exail Technologies SA on December 28, 2024 and sell it today you would earn a total of  2,425  from holding Exail Technologies SA or generate 139.37% 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.  Exail Technologies SA

Sartorius Stedim Biotech

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 1 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Exail Technologies

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Exail Technologies SA are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Exail Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sartorius Stedim and Exail Technologies

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

The idea behind Sartorius Stedim Biotech and Exail Technologies SA 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.