Correlation Between Straumann Holding and Sidetrade
Can any of the company-specific risk be diversified away by investing in both Straumann Holding and Sidetrade 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 Straumann Holding and Sidetrade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Straumann Holding AG and Sidetrade, you can compare the effects of market volatilities on Straumann Holding and Sidetrade 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 Straumann Holding with a short position of Sidetrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Sidetrade.
Diversification Opportunities for Straumann Holding and Sidetrade
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Straumann and Sidetrade is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Sidetrade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidetrade and Straumann Holding 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 Straumann Holding AG are associated (or correlated) with Sidetrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidetrade has no effect on the direction of Straumann Holding i.e., Straumann Holding and Sidetrade go up and down completely randomly.
Pair Corralation between Straumann Holding and Sidetrade
Assuming the 90 days trading horizon Straumann Holding is expected to generate 4.14 times less return on investment than Sidetrade. But when comparing it to its historical volatility, Straumann Holding AG is 1.02 times less risky than Sidetrade. It trades about 0.01 of its potential returns per unit of risk. Sidetrade is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,500 in Sidetrade on September 3, 2024 and sell it today you would earn a total of 7,900 from holding Sidetrade or generate 54.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.42% |
| Values | Daily Returns |
Straumann Holding AG vs. Sidetrade
Performance |
| Timeline |
| Straumann Holding |
| Sidetrade |
Straumann Holding and Sidetrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Straumann Holding and Sidetrade
The main advantage of trading using opposite Straumann Holding and Sidetrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Straumann Holding position performs unexpectedly, Sidetrade 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 Sidetrade will offset losses from the drop in Sidetrade's long position.| Straumann Holding vs. Sonova H Ag | Straumann Holding vs. Sika AG | Straumann Holding vs. Lonza Group AG | Straumann Holding vs. Givaudan SA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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