Correlation Between Sulzer AG and Valartis Group

Can any of the company-specific risk be diversified away by investing in both Sulzer AG and Valartis Group 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 Sulzer AG and Valartis Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sulzer AG and Valartis Group AG, you can compare the effects of market volatilities on Sulzer AG and Valartis Group 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 Sulzer AG with a short position of Valartis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sulzer AG and Valartis Group.

Diversification Opportunities for Sulzer AG and Valartis Group

-0.51

Correlation Coefficient

Sulzer AG  Valartis Group

Excellent diversification

The 3 months correlation between Sulzer and Valartis is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sulzer AG and Valartis Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valartis Group AG and Sulzer AG 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 Sulzer AG are associated (or correlated) with Valartis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valartis Group AG has no effect on the direction of Sulzer AG i.e., Sulzer AG and Valartis Group go up and down completely randomly.

Pair Corralation between Sulzer AG and Valartis Group

Assuming the 90 days trading horizon Sulzer AG is expected to generate 0.49 times more return on investment than Valartis Group. However, Sulzer AG is 2.03 times less risky than Valartis Group. It trades about 0.09 of its potential returns per unit of risk. Valartis Group AG is currently generating about -0.01 per unit of risk. If you would invest  13,820  in Sulzer AG on April 24, 2025 and sell it today you would earn a total of  1,100  from holding Sulzer AG or generate 7.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.1%
Values	Daily Returns

Sulzer AG  vs.  Valartis Group AG

Sulzer AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sulzer AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sulzer AG may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Valartis Group AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Valartis Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Valartis Group is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sulzer AG and Valartis Group

The main advantage of trading using opposite Sulzer AG and Valartis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulzer AG position performs unexpectedly, Valartis Group 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 Valartis Group will offset losses from the drop in Valartis Group's long position.

The idea behind Sulzer AG and Valartis Group AG 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.