Correlation Between SMA Solar and Sartorius Stedim
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and Sartorius Stedim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Sartorius Stedim Biotech, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Sartorius Stedim.
Diversification Opportunities for SMA Solar and Sartorius Stedim
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMA and Sartorius is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology 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 SMA Solar 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 SMA Solar Technology 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 SMA Solar i.e., SMA Solar and Sartorius Stedim go up and down completely randomly.
Pair Corralation between SMA Solar and Sartorius Stedim
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Sartorius Stedim. In addition to that, SMA Solar is 1.3 times more volatile than Sartorius Stedim Biotech. It trades about -0.07 of its total potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about -0.02 per unit of volatility. If you would invest 30,065 in Sartorius Stedim Biotech on October 13, 2024 and sell it today you would lose (10,240) from holding Sartorius Stedim Biotech or give up 34.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Sartorius Stedim Biotech
Performance |
| Timeline |
| SMA Solar Technology |
| Sartorius Stedim Biotech |
SMA Solar and Sartorius Stedim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Sartorius Stedim
The main advantage of trading using opposite SMA Solar and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.| SMA Solar vs. US Physical Therapy | SMA Solar vs. UNIDOC HEALTH P | SMA Solar vs. Major Drilling Group | SMA Solar vs. CENTURIA OFFICE REIT |
| Sartorius Stedim vs. United Airlines Holdings | Sartorius Stedim vs. China Eastern Airlines | Sartorius Stedim vs. SMA Solar Technology | Sartorius Stedim vs. Nok Airlines PCL |
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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