Correlation Between CVW CLEANTECH and SARTORIUS

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

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

Diversification Opportunities for CVW CLEANTECH and SARTORIUS

-0.41

Correlation Coefficient

CVW CLEANTECH  SARTORIUS

Very good diversification

The 3 months correlation between CVW and SARTORIUS is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC 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 CVW CLEANTECH 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 CVW CLEANTECH INC 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 CVW CLEANTECH i.e., CVW CLEANTECH and SARTORIUS go up and down completely randomly.

Pair Corralation between CVW CLEANTECH and SARTORIUS

Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to generate 1.53 times more return on investment than SARTORIUS. However, CVW CLEANTECH is 1.53 times more volatile than SARTORIUS AG UNSPADR. It trades about 0.03 of its potential returns per unit of risk. SARTORIUS AG UNSPADR is currently generating about -0.04 per unit of risk. If you would invest  52.00  in CVW CLEANTECH INC on October 8, 2024 and sell it today you would earn a total of  6.00  from holding CVW CLEANTECH INC or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

CVW CLEANTECH INC  vs.  SARTORIUS AG UNSPADR

CVW CLEANTECH INC

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CVW CLEANTECH INC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, CVW CLEANTECH may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SARTORIUS AG UNSPADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SARTORIUS AG UNSPADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CVW CLEANTECH and SARTORIUS

The main advantage of trading using opposite CVW CLEANTECH and SARTORIUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH 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 CVW CLEANTECH INC 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.

Check out your portfolio center.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.