Correlation Between Sartorius Stedim and Compagnie Industrielle

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

Diversification Opportunities for Sartorius Stedim and Compagnie Industrielle

-0.52

Correlation Coefficient

Sartorius Stedim  Compagnie Industrielle

Excellent diversification

The 3 months correlation between Sartorius and Compagnie is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Stedim Biotech and Compagnie Industrielle et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Industrielle 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 Compagnie Industrielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Industrielle has no effect on the direction of Sartorius Stedim i.e., Sartorius Stedim and Compagnie Industrielle go up and down completely randomly.

Pair Corralation between Sartorius Stedim and Compagnie Industrielle

Assuming the 90 days trading horizon Sartorius Stedim Biotech is expected to generate 0.88 times more return on investment than Compagnie Industrielle. However, Sartorius Stedim Biotech is 1.14 times less risky than Compagnie Industrielle. It trades about 0.02 of its potential returns per unit of risk. Compagnie Industrielle et is currently generating about -0.04 per unit of risk. If you would invest  18,425  in Sartorius Stedim Biotech on December 30, 2024 and sell it today you would earn a total of  140.00  from holding Sartorius Stedim Biotech or generate 0.76% return on investment over 90 days.

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

Sartorius Stedim Biotech  vs.  Compagnie Industrielle et

Sartorius Stedim Biotech

Risk-Adjusted Performance

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.

Compagnie Industrielle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compagnie Industrielle et has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Compagnie Industrielle is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sartorius Stedim and Compagnie Industrielle

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

The idea behind Sartorius Stedim Biotech and Compagnie Industrielle et 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.