Correlation Between Bioventus and Accuray Incorporated

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

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

Diversification Opportunities for Bioventus and Accuray Incorporated

0.38

Correlation Coefficient

Bioventus  Accuray Incorporated

Weak diversification

The 3 months correlation between Bioventus and Accuray is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bioventus and Accuray Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accuray Incorporated and Bioventus 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 Bioventus 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 Bioventus i.e., Bioventus and Accuray Incorporated go up and down completely randomly.

Pair Corralation between Bioventus and Accuray Incorporated

Considering the 90-day investment horizon Bioventus is expected to under-perform the Accuray Incorporated. In addition to that, Bioventus is 1.14 times more volatile than Accuray Incorporated. It trades about -0.04 of its total potential returns per unit of risk. Accuray Incorporated is currently generating about 0.03 per unit of volatility. If you would invest  179.00  in Accuray Incorporated on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Accuray Incorporated or generate 1.68% return on investment over 90 days.

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

Bioventus  vs.  Accuray Incorporated

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.

Accuray Incorporated

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accuray Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Accuray Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bioventus and Accuray Incorporated

The main advantage of trading using opposite Bioventus and Accuray Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bioventus 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 Bioventus 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.