Correlation Between Si Bone and NuVasive

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

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

Diversification Opportunities for Si Bone and NuVasive

0.0

Correlation Coefficient

Si Bone  NuVasive

Pay attention - limited upside

The 3 months correlation between SIBN and NuVasive is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Si Bone and NuVasive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuVasive and Si Bone 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 Si Bone are associated (or correlated) with NuVasive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuVasive has no effect on the direction of Si Bone i.e., Si Bone and NuVasive go up and down completely randomly.

Pair Corralation between Si Bone and NuVasive

If you would invest  1,598  in Si Bone on November 27, 2024 and sell it today you would earn a total of  246.00  from holding Si Bone or generate 15.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Si Bone  vs.  NuVasive

Si Bone

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Si Bone are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Si Bone displayed solid returns over the last few months and may actually be approaching a breakup point.

NuVasive

Risk-Adjusted Performance

Very Weak

Over the last 90 days NuVasive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NuVasive is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Si Bone and NuVasive

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

The idea behind Si Bone and NuVasive 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.