Correlation Between SEB SA and Sartorius Stedim
Can any of the company-specific risk be diversified away by investing in both SEB 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 SEB 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 SEB SA and Sartorius Stedim Biotech, you can compare the effects of market volatilities on SEB 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 SEB SA with a short position of Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEB SA and Sartorius Stedim.
Diversification Opportunities for SEB SA and Sartorius Stedim
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEB and Sartorius is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SEB 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 SEB 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 SEB 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 SEB SA i.e., SEB SA and Sartorius Stedim go up and down completely randomly.
Pair Corralation between SEB SA and Sartorius Stedim
Assuming the 90 days horizon SEB SA is expected to under-perform the Sartorius Stedim. But the stock apears to be less risky and, when comparing its historical volatility, SEB SA is 1.19 times less risky than Sartorius Stedim. The stock trades about -0.18 of its potential returns per unit of risk. The Sartorius Stedim Biotech is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 19,075 in Sartorius Stedim Biotech on August 28, 2024 and sell it today you would lose (1,235) from holding Sartorius Stedim Biotech or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEB SA vs. Sartorius Stedim Biotech
Performance |
| Timeline |
| SEB SA |
| Sartorius Stedim Biotech |
SEB SA and Sartorius Stedim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEB SA and Sartorius Stedim
The main advantage of trading using opposite SEB SA and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEB 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.The idea behind SEB SA and Sartorius Stedim Biotech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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