Correlation Between Bone Biologics and American Medical
Can any of the company-specific risk be diversified away by investing in both Bone Biologics and American Medical 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 American Medical 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 American Medical Technologies, you can compare the effects of market volatilities on Bone Biologics and American Medical 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 American Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bone Biologics and American Medical.
Diversification Opportunities for Bone Biologics and American Medical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bone and American is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bone Biologics Corp and American Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Medical Tec 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 American Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Medical Tec has no effect on the direction of Bone Biologics i.e., Bone Biologics and American Medical go up and down completely randomly.
Pair Corralation between Bone Biologics and American Medical
Assuming the 90 days horizon Bone Biologics Corp is expected to generate 3.07 times more return on investment than American Medical. However, Bone Biologics is 3.07 times more volatile than American Medical Technologies. It trades about 0.09 of its potential returns per unit of risk. American Medical Technologies is currently generating about -0.16 per unit of risk. If you would invest 3.00 in Bone Biologics Corp on September 3, 2024 and sell it today you would earn a total of 2,777 from holding Bone Biologics Corp or generate 92566.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 7.88% |
| Values | Daily Returns |
Bone Biologics Corp vs. American Medical Technologies
Performance |
| Timeline |
| Bone Biologics Corp |
| American Medical Tec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bone Biologics and American Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bone Biologics and American Medical
The main advantage of trading using opposite Bone Biologics and American Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bone Biologics position performs unexpectedly, American Medical 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 American Medical will offset losses from the drop in American Medical's long position.| Bone Biologics vs. Tandem Diabetes Care | Bone Biologics vs. Inspire Medical Systems | Bone Biologics vs. Penumbra | Bone Biologics vs. Insulet |
| American Medical vs. Milestone Scientific | American Medical vs. Repro Med Systems | American Medical vs. Akoya Biosciences | American Medical vs. Pro Dex |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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