Correlation Between Cellink AB and Sonova Holding
Can any of the company-specific risk be diversified away by investing in both Cellink AB and Sonova Holding 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 Cellink AB and Sonova Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cellink AB and Sonova Holding AG, you can compare the effects of market volatilities on Cellink AB and Sonova Holding 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 Cellink AB with a short position of Sonova Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellink AB and Sonova Holding.
Diversification Opportunities for Cellink AB and Sonova Holding
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cellink and Sonova is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cellink AB and Sonova Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonova Holding AG and Cellink AB 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 Cellink AB are associated (or correlated) with Sonova Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonova Holding AG has no effect on the direction of Cellink AB i.e., Cellink AB and Sonova Holding go up and down completely randomly.
Pair Corralation between Cellink AB and Sonova Holding
Assuming the 90 days horizon Cellink AB is expected to under-perform the Sonova Holding. In addition to that, Cellink AB is 3.09 times more volatile than Sonova Holding AG. It trades about -0.01 of its total potential returns per unit of risk. Sonova Holding AG is currently generating about 0.05 per unit of volatility. If you would invest 5,073 in Sonova Holding AG on August 24, 2024 and sell it today you would earn a total of 1,909 from holding Sonova Holding AG or generate 37.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cellink AB vs. Sonova Holding AG
Performance |
| Timeline |
| Cellink AB |
| Sonova Holding AG |
Cellink AB and Sonova Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cellink AB and Sonova Holding
The main advantage of trading using opposite Cellink AB and Sonova Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellink AB position performs unexpectedly, Sonova Holding 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 Sonova Holding will offset losses from the drop in Sonova Holding's long position.| Cellink AB vs. Armm Inc | Cellink AB vs. Bone Biologics Corp | Cellink AB vs. BICO Group AB | Cellink AB vs. Anteris Technologies |
| Sonova Holding vs. Armm Inc | Sonova Holding vs. Cellink AB | Sonova Holding vs. Bone Biologics Corp | Sonova Holding vs. BICO Group AB |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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