Correlation Between Axogen and Bioventus

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

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

Diversification Opportunities for Axogen and Bioventus

-0.11

Correlation Coefficient

Axogen  Bioventus

Good diversification

The 3 months correlation between Axogen and Bioventus is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Axogen Inc and Bioventus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioventus and Axogen 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 Axogen Inc are associated (or correlated) with Bioventus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioventus has no effect on the direction of Axogen i.e., Axogen and Bioventus go up and down completely randomly.

Pair Corralation between Axogen and Bioventus

Given the investment horizon of 90 days Axogen Inc is expected to generate 0.9 times more return on investment than Bioventus. However, Axogen Inc is 1.11 times less risky than Bioventus. It trades about 0.08 of its potential returns per unit of risk. Bioventus is currently generating about -0.04 per unit of risk. If you would invest  1,649  in Axogen Inc on December 29, 2024 and sell it today you would earn a total of  250.00  from holding Axogen Inc or generate 15.16% return on investment over 90 days.

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

Axogen Inc  vs.  Bioventus

Axogen Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axogen Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Axogen displayed solid returns over the last few months and may actually be approaching a breakup point.

Bioventus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bioventus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Axogen and Bioventus

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

The idea behind Axogen Inc and Bioventus 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.