Correlation Between Sartorius Stedim and EJF Investments
Can any of the company-specific risk be diversified away by investing in both Sartorius Stedim and EJF Investments 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 EJF Investments 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 EJF Investments, you can compare the effects of market volatilities on Sartorius Stedim and EJF Investments 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 EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sartorius Stedim and EJF Investments.
Diversification Opportunities for Sartorius Stedim and EJF Investments
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sartorius and EJF is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sartorius Stedim Biotech and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments 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 EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of Sartorius Stedim i.e., Sartorius Stedim and EJF Investments go up and down completely randomly.
Pair Corralation between Sartorius Stedim and EJF Investments
Assuming the 90 days trading horizon Sartorius Stedim Biotech is expected to under-perform the EJF Investments. In addition to that, Sartorius Stedim is 2.1 times more volatile than EJF Investments. It trades about -0.01 of its total potential returns per unit of risk. EJF Investments is currently generating about 0.03 per unit of volatility. If you would invest 10,532 in EJF Investments on October 13, 2024 and sell it today you would earn a total of 2,018 from holding EJF Investments or generate 19.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sartorius Stedim Biotech vs. EJF Investments
Performance |
| Timeline |
| Sartorius Stedim Biotech |
| EJF Investments |
Sartorius Stedim and EJF Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sartorius Stedim and EJF Investments
The main advantage of trading using opposite Sartorius Stedim and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sartorius Stedim position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' long position.| Sartorius Stedim vs. Walmart | Sartorius Stedim vs. BYD Co | Sartorius Stedim vs. Volkswagen AG | Sartorius Stedim vs. Volkswagen AG Non Vtg |
| EJF Investments vs. Verizon Communications | EJF Investments vs. JB Hunt Transport | EJF Investments vs. Science in Sport | EJF Investments vs. Sartorius Stedim Biotech |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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