Correlation Between Sartorius Aktiengesellscha and SARTORIUS

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

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

Diversification Opportunities for Sartorius Aktiengesellscha and SARTORIUS

0.75

Correlation Coefficient

Sartorius Aktiengesellscha  SARTORIUS

Poor diversification

The 3 months correlation between Sartorius and SARTORIUS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Aktiengesellschaft and SARTORIUS AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SARTORIUS AG UNSPADR and Sartorius Aktiengesellscha 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 Aktiengesellschaft are associated (or correlated) with SARTORIUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SARTORIUS AG UNSPADR has no effect on the direction of Sartorius Aktiengesellscha i.e., Sartorius Aktiengesellscha and SARTORIUS go up and down completely randomly.

Pair Corralation between Sartorius Aktiengesellscha and SARTORIUS

Assuming the 90 days trading horizon Sartorius Aktiengesellscha is expected to generate 58.54 times less return on investment than SARTORIUS. But when comparing it to its historical volatility, Sartorius Aktiengesellschaft is 1.02 times less risky than SARTORIUS. It trades about 0.0 of its potential returns per unit of risk. SARTORIUS AG UNSPADR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,620  in SARTORIUS AG UNSPADR on October 12, 2024 and sell it today you would earn a total of  60.00  from holding SARTORIUS AG UNSPADR or generate 1.66% return on investment over 90 days.

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

Sartorius Aktiengesellschaft  vs.  SARTORIUS AG UNSPADR

Sartorius Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sartorius Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sartorius Aktiengesellscha is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SARTORIUS AG UNSPADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SARTORIUS AG UNSPADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SARTORIUS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sartorius Aktiengesellscha and SARTORIUS

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

The idea behind Sartorius Aktiengesellschaft and SARTORIUS AG UNSPADR 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.