Correlation Between Establishment Labs and Si Bone
Can any of the company-specific risk be diversified away by investing in both Establishment Labs and Si Bone 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 Establishment Labs and Si Bone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Establishment Labs Holdings and Si Bone, you can compare the effects of market volatilities on Establishment Labs and Si Bone 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 Establishment Labs with a short position of Si Bone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Establishment Labs and Si Bone.
Diversification Opportunities for Establishment Labs and Si Bone
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Establishment and SIBN is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Establishment Labs Holdings and Si Bone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Si Bone and Establishment Labs 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 Establishment Labs Holdings are associated (or correlated) with Si Bone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Si Bone has no effect on the direction of Establishment Labs i.e., Establishment Labs and Si Bone go up and down completely randomly.
Pair Corralation between Establishment Labs and Si Bone
Given the investment horizon of 90 days Establishment Labs Holdings is expected to generate 1.45 times more return on investment than Si Bone. However, Establishment Labs is 1.45 times more volatile than Si Bone. It trades about 0.0 of its potential returns per unit of risk. Si Bone is currently generating about -0.05 per unit of risk. If you would invest 6,795 in Establishment Labs Holdings on August 31, 2024 and sell it today you would lose (2,206) from holding Establishment Labs Holdings or give up 32.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Establishment Labs Holdings vs. Si Bone
Performance |
| Timeline |
| Establishment Labs |
| Si Bone |
Establishment Labs and Si Bone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Establishment Labs and Si Bone
The main advantage of trading using opposite Establishment Labs and Si Bone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Establishment Labs position performs unexpectedly, Si Bone 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 Si Bone will offset losses from the drop in Si Bone's long position.| Establishment Labs vs. Orthopediatrics Corp | Establishment Labs vs. Integer Holdings Corp | Establishment Labs vs. Treace Medical Concepts | Establishment Labs vs. CONMED |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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