Correlation Between Sonova Holding and Bone Biologics

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Can any of the company-specific risk be diversified away by investing in both Sonova Holding 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 Sonova Holding and Bone Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonova Holding AG and Bone Biologics Corp, you can compare the effects of market volatilities on Sonova Holding 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 Sonova Holding with a short position of Bone Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonova Holding and Bone Biologics.

Diversification Opportunities for Sonova Holding and Bone Biologics

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Sonova and Bone is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sonova Holding AG 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 Sonova Holding 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 Sonova Holding AG 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 Sonova Holding i.e., Sonova Holding and Bone Biologics go up and down completely randomly.

Pair Corralation between Sonova Holding and Bone Biologics

Assuming the 90 days horizon Sonova Holding AG is expected to generate 0.25 times more return on investment than Bone Biologics. However, Sonova Holding AG is 4.02 times less risky than Bone Biologics. It trades about -0.11 of its potential returns per unit of risk. Bone Biologics Corp is currently generating about -0.12 per unit of risk. If you would invest  7,380  in Sonova Holding AG on September 5, 2024 and sell it today you would lose (626.00) from holding Sonova Holding AG or give up 8.48% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sonova Holding AG  vs.  Bone Biologics Corp

 Performance 
       Timeline  
Sonova Holding AG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sonova Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sonova Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Bone Biologics Corp 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Bone Biologics Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Bone Biologics reported solid returns over the last few months and may actually be approaching a breakup point.

Sonova Holding and Bone Biologics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sonova Holding and Bone Biologics

The main advantage of trading using opposite Sonova Holding and Bone Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonova Holding 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 Sonova Holding AG 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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