Correlation Between Flowtech Fluidpower and Sartorius Stedim

Can any of the company-specific risk be diversified away by investing in both Flowtech Fluidpower 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 Flowtech Fluidpower and Sartorius Stedim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flowtech Fluidpower plc and Sartorius Stedim Biotech, you can compare the effects of market volatilities on Flowtech Fluidpower 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 Flowtech Fluidpower with a short position of Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowtech Fluidpower and Sartorius Stedim.

Diversification Opportunities for Flowtech Fluidpower and Sartorius Stedim

0.48

Correlation Coefficient

Flowtech Fluidpower  Sartorius Stedim

Very weak diversification

The 3 months correlation between Flowtech and Sartorius is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Flowtech Fluidpower plc 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 Flowtech Fluidpower 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 Flowtech Fluidpower plc 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 Flowtech Fluidpower i.e., Flowtech Fluidpower and Sartorius Stedim go up and down completely randomly.

Pair Corralation between Flowtech Fluidpower and Sartorius Stedim

Assuming the 90 days trading horizon Flowtech Fluidpower is expected to generate 1.3 times less return on investment than Sartorius Stedim. But when comparing it to its historical volatility, Flowtech Fluidpower plc is 1.24 times less risky than Sartorius Stedim. It trades about 0.19 of its potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  15,420  in Sartorius Stedim Biotech on April 5, 2025 and sell it today you would earn a total of  5,120  from holding Sartorius Stedim Biotech or generate 33.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Flowtech Fluidpower plc  vs.  Sartorius Stedim Biotech

Flowtech Fluidpower plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flowtech Fluidpower plc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Flowtech Fluidpower exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sartorius Stedim Biotech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sartorius Stedim unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flowtech Fluidpower and Sartorius Stedim

The main advantage of trading using opposite Flowtech Fluidpower and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowtech Fluidpower 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 Flowtech Fluidpower plc 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.