Correlation Between Sotera Health and Neogen
Can any of the company-specific risk be diversified away by investing in both Sotera Health and Neogen 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 Sotera Health and Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sotera Health Co and Neogen, you can compare the effects of market volatilities on Sotera Health and Neogen 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 Sotera Health with a short position of Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotera Health and Neogen.
Diversification Opportunities for Sotera Health and Neogen
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sotera and Neogen is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sotera Health Co and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen and Sotera Health 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 Sotera Health Co are associated (or correlated) with Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Sotera Health i.e., Sotera Health and Neogen go up and down completely randomly.
Pair Corralation between Sotera Health and Neogen
Considering the 90-day investment horizon Sotera Health Co is expected to generate 0.85 times more return on investment than Neogen. However, Sotera Health Co is 1.18 times less risky than Neogen. It trades about -0.01 of its potential returns per unit of risk. Neogen is currently generating about -0.03 per unit of risk. If you would invest 1,523 in Sotera Health Co on November 3, 2024 and sell it today you would lose (152.00) from holding Sotera Health Co or give up 9.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sotera Health Co vs. Neogen
Performance |
| Timeline |
| Sotera Health |
| Neogen |
Sotera Health and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sotera Health and Neogen
The main advantage of trading using opposite Sotera Health and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sotera Health position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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