Correlation Between Mettler Toledo and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Mettler Toledo and Sotera Health 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 Mettler Toledo and Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mettler Toledo International and Sotera Health Co, you can compare the effects of market volatilities on Mettler Toledo and Sotera Health 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 Mettler Toledo with a short position of Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mettler Toledo and Sotera Health.
Diversification Opportunities for Mettler Toledo and Sotera Health
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mettler and Sotera is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mettler Toledo International and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and Mettler Toledo 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 Mettler Toledo International are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Mettler Toledo i.e., Mettler Toledo and Sotera Health go up and down completely randomly.
Pair Corralation between Mettler Toledo and Sotera Health
Considering the 90-day investment horizon Mettler Toledo International is expected to generate 0.98 times more return on investment than Sotera Health. However, Mettler Toledo International is 1.02 times less risky than Sotera Health. It trades about 0.39 of its potential returns per unit of risk. Sotera Health Co is currently generating about 0.09 per unit of risk. If you would invest 122,078 in Mettler Toledo International on November 2, 2024 and sell it today you would earn a total of 14,372 from holding Mettler Toledo International or generate 11.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mettler Toledo International vs. Sotera Health Co
Performance |
| Timeline |
| Mettler Toledo Inter |
| Sotera Health |
Mettler Toledo and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mettler Toledo and Sotera Health
The main advantage of trading using opposite Mettler Toledo and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mettler Toledo position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| Mettler Toledo vs. IDEXX Laboratories | Mettler Toledo vs. Charles River Laboratories | Mettler Toledo vs. Agilent Technologies | Mettler Toledo vs. Revvity |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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