Correlation Between Nephros and Straumann Holding
Can any of the company-specific risk be diversified away by investing in both Nephros and Straumann 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 Nephros and Straumann Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nephros and Straumann Holding AG, you can compare the effects of market volatilities on Nephros and Straumann 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 Nephros with a short position of Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nephros and Straumann Holding.
Diversification Opportunities for Nephros and Straumann Holding
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nephros and Straumann is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nephros and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Nephros 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 Nephros are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Nephros i.e., Nephros and Straumann Holding go up and down completely randomly.
Pair Corralation between Nephros and Straumann Holding
Given the investment horizon of 90 days Nephros is expected to under-perform the Straumann Holding. But the stock apears to be less risky and, when comparing its historical volatility, Nephros is 1.92 times less risky than Straumann Holding. The stock trades about -0.12 of its potential returns per unit of risk. The Straumann Holding AG is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 14,790 in Straumann Holding AG on September 2, 2024 and sell it today you would lose (2,181) from holding Straumann Holding AG or give up 14.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nephros vs. Straumann Holding AG
Performance |
| Timeline |
| Nephros |
| Straumann Holding |
Nephros and Straumann Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nephros and Straumann Holding
The main advantage of trading using opposite Nephros and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nephros position performs unexpectedly, Straumann 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.| Nephros vs. Precision Optics, | Nephros vs. Repro Med Systems | Nephros vs. InfuSystems Holdings | Nephros vs. Utah Medical Products |
| Straumann Holding vs. Sysmex Corp | Straumann Holding vs. Coloplast A | Straumann Holding vs. Hoya Corp | Straumann Holding vs. Utah Medical Products |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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