Correlation Between Bone Biologics and Novacyt SA
Can any of the company-specific risk be diversified away by investing in both Bone Biologics and Novacyt SA 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 Novacyt SA 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 Novacyt SA, you can compare the effects of market volatilities on Bone Biologics and Novacyt SA 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 Novacyt SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bone Biologics and Novacyt SA.
Diversification Opportunities for Bone Biologics and Novacyt SA
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bone and Novacyt is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bone Biologics Corp and Novacyt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novacyt SA 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 Novacyt SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novacyt SA has no effect on the direction of Bone Biologics i.e., Bone Biologics and Novacyt SA go up and down completely randomly.
Pair Corralation between Bone Biologics and Novacyt SA
Assuming the 90 days horizon Bone Biologics Corp is expected to under-perform the Novacyt SA. But the stock apears to be less risky and, when comparing its historical volatility, Bone Biologics Corp is 10.13 times less risky than Novacyt SA. The stock trades about -0.22 of its potential returns per unit of risk. The Novacyt SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Novacyt SA on September 25, 2024 and sell it today you would earn a total of 4.00 from holding Novacyt SA or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bone Biologics Corp vs. Novacyt SA
Performance |
| Timeline |
| Bone Biologics Corp |
| Novacyt SA |
Bone Biologics and Novacyt SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bone Biologics and Novacyt SA
The main advantage of trading using opposite Bone Biologics and Novacyt SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bone Biologics position performs unexpectedly, Novacyt SA 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 Novacyt SA will offset losses from the drop in Novacyt SA's long position.| Bone Biologics vs. Bone Biologics Corp | Bone Biologics vs. Biofrontera Warrants | Bone Biologics vs. Inspira Technologies Oxy |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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