Correlation Between Aziyo Biologics and Si Bone

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

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

Diversification Opportunities for Aziyo Biologics and Si Bone

-0.49

Correlation Coefficient

Aziyo Biologics  Si Bone

Very good diversification

The 3 months correlation between Aziyo and SIBN is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aziyo Biologics and Si Bone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Si Bone and Aziyo Biologics 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 Aziyo Biologics are associated (or correlated) with Si Bone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Si Bone has no effect on the direction of Aziyo Biologics i.e., Aziyo Biologics and Si Bone go up and down completely randomly.

Pair Corralation between Aziyo Biologics and Si Bone

Given the investment horizon of 90 days Aziyo Biologics is expected to generate 2.39 times more return on investment than Si Bone. However, Aziyo Biologics is 2.39 times more volatile than Si Bone. It trades about 0.01 of its potential returns per unit of risk. Si Bone is currently generating about 0.02 per unit of risk. If you would invest  373.00  in Aziyo Biologics on September 2, 2024 and sell it today you would lose (129.00) from holding Aziyo Biologics or give up 34.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	31.05%
Values	Daily Returns

Aziyo Biologics  vs.  Si Bone

Aziyo Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aziyo Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aziyo Biologics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Si Bone

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Si Bone has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Aziyo Biologics and Si Bone

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

The idea behind Aziyo Biologics and Si Bone 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.