Correlation Between Arkema SA and Sartorius Stedim
Can any of the company-specific risk be diversified away by investing in both Arkema SA and Sartorius Stedim 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 Arkema SA and Sartorius Stedim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkema SA and Sartorius Stedim Biotech, you can compare the effects of market volatilities on Arkema SA and Sartorius Stedim 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 Arkema SA with a short position of Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkema SA and Sartorius Stedim.
Diversification Opportunities for Arkema SA and Sartorius Stedim
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arkema and Sartorius is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Arkema SA and Sartorius Stedim Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Stedim Biotech and Arkema SA 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 Arkema SA are associated (or correlated) with Sartorius Stedim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Stedim Biotech has no effect on the direction of Arkema SA i.e., Arkema SA and Sartorius Stedim go up and down completely randomly.
Pair Corralation between Arkema SA and Sartorius Stedim
Assuming the 90 days trading horizon Arkema SA is expected to under-perform the Sartorius Stedim. But the stock apears to be less risky and, when comparing its historical volatility, Arkema SA is 1.84 times less risky than Sartorius Stedim. The stock trades about -0.03 of its potential returns per unit of risk. The Sartorius Stedim Biotech is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20,256 in Sartorius Stedim Biotech on September 2, 2024 and sell it today you would lose (2,221) from holding Sartorius Stedim Biotech or give up 10.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arkema SA vs. Sartorius Stedim Biotech
Performance |
| Timeline |
| Arkema SA |
| Sartorius Stedim Biotech |
Arkema SA and Sartorius Stedim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arkema SA and Sartorius Stedim
The main advantage of trading using opposite Arkema SA and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkema SA position performs unexpectedly, Sartorius Stedim 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 Stedim will offset losses from the drop in Sartorius Stedim's long position.| Arkema SA vs. Voltalia SA | Arkema SA vs. Ecoslops SA | Arkema SA vs. Agripower France Sa | Arkema SA vs. Enertime SAS |
| Sartorius Stedim vs. Eurofins Scientific SE | Sartorius Stedim vs. Teleperformance SE | Sartorius Stedim vs. Biomerieux SA | Sartorius Stedim vs. Dassault Systemes SE |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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