Correlation Between IRIDEX and Bone Biologics

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

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

Diversification Opportunities for IRIDEX and Bone Biologics

0.72

Correlation Coefficient

IRIDEX  Bone Biologics

Poor diversification

The 3 months correlation between IRIDEX and Bone is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding IRIDEX and Bone Biologics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bone Biologics Corp and IRIDEX 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 IRIDEX are associated (or correlated) with Bone Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bone Biologics Corp has no effect on the direction of IRIDEX i.e., IRIDEX and Bone Biologics go up and down completely randomly.

Pair Corralation between IRIDEX and Bone Biologics

Given the investment horizon of 90 days IRIDEX is expected to under-perform the Bone Biologics. In addition to that, IRIDEX is 1.32 times more volatile than Bone Biologics Corp. It trades about -0.14 of its total potential returns per unit of risk. Bone Biologics Corp is currently generating about -0.01 per unit of volatility. If you would invest  94.00  in Bone Biologics Corp on December 28, 2024 and sell it today you would lose (9.00) from holding Bone Biologics Corp or give up 9.57% of portfolio value over 90 days.

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

IRIDEX  vs.  Bone Biologics Corp

IRIDEX

Risk-Adjusted Performance

Very Weak

Over the last 90 days IRIDEX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bone Biologics Corp

Risk-Adjusted Performance

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 nearly stable essential indicators, Bone Biologics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IRIDEX and Bone Biologics

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

The idea behind IRIDEX and Bone Biologics Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.