Correlation Between Sotera Health and Qiagen NV

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

By analyzing existing cross correlation between Sotera Health Co and Qiagen NV, you can compare the effects of market volatilities on Sotera Health and Qiagen NV 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 Sotera Health with a short position of Qiagen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotera Health and Qiagen NV.

Diversification Opportunities for Sotera Health and Qiagen NV

0.57

Correlation Coefficient

Sotera Health  Qiagen NV

Very weak diversification

The 3 months correlation between Sotera and Qiagen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sotera Health Co and Qiagen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qiagen NV and Sotera Health 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 Sotera Health Co are associated (or correlated) with Qiagen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qiagen NV has no effect on the direction of Sotera Health i.e., Sotera Health and Qiagen NV go up and down completely randomly.

Pair Corralation between Sotera Health and Qiagen NV

Considering the 90-day investment horizon Sotera Health Co is expected to generate 1.46 times more return on investment than Qiagen NV. However, Sotera Health is 1.46 times more volatile than Qiagen NV. It trades about -0.08 of its potential returns per unit of risk. Qiagen NV is currently generating about -0.13 per unit of risk. If you would invest  1,336  in Sotera Health Co on December 28, 2024 and sell it today you would lose (156.00) from holding Sotera Health Co or give up 11.68% of portfolio value over 90 days.

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

Sotera Health Co  vs.  Qiagen NV

Sotera Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sotera Health Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Qiagen NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qiagen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Sotera Health and Qiagen NV

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

The idea behind Sotera Health Co and Qiagen NV 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.