Correlation Between Bone Biologics and Accuray Incorporated

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

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

Diversification Opportunities for Bone Biologics and Accuray Incorporated

-0.34

Correlation Coefficient

Bone Biologics  Accuray Incorporated

Very good diversification

The 3 months correlation between Bone and Accuray is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bone Biologics Corp and Accuray Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accuray Incorporated and Bone 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 Bone Biologics Corp are associated (or correlated) with Accuray Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accuray Incorporated has no effect on the direction of Bone Biologics i.e., Bone Biologics and Accuray Incorporated go up and down completely randomly.

Pair Corralation between Bone Biologics and Accuray Incorporated

Given the investment horizon of 90 days Bone Biologics Corp is expected to under-perform the Accuray Incorporated. But the stock apears to be less risky and, when comparing its historical volatility, Bone Biologics Corp is 1.17 times less risky than Accuray Incorporated. The stock trades about -0.31 of its potential returns per unit of risk. The Accuray Incorporated is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  203.00  in Accuray Incorporated on October 5, 2024 and sell it today you would lose (5.00) from holding Accuray Incorporated or give up 2.46% of portfolio value over 90 days.

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

Bone Biologics Corp  vs.  Accuray Incorporated

Bone Biologics Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bone Biologics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Accuray Incorporated

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accuray Incorporated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Accuray Incorporated may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bone Biologics and Accuray Incorporated

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

The idea behind Bone Biologics Corp and Accuray Incorporated 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.