Correlation Between Outset Medical and Bone Biologics
Can any of the company-specific risk be diversified away by investing in both Outset Medical and Bone Biologics 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 Outset Medical and Bone Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and Bone Biologics Corp, you can compare the effects of market volatilities on Outset Medical and Bone Biologics 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 Outset Medical with a short position of Bone Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and Bone Biologics.
Diversification Opportunities for Outset Medical and Bone Biologics
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Outset and Bone is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Bone Biologics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bone Biologics Corp and Outset Medical 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 Outset Medical are associated (or correlated) with Bone Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bone Biologics Corp has no effect on the direction of Outset Medical i.e., Outset Medical and Bone Biologics go up and down completely randomly.
Pair Corralation between Outset Medical and Bone Biologics
Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the Bone Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Outset Medical is 1.69 times less risky than Bone Biologics. The stock trades about -0.06 of its potential returns per unit of risk. The Bone Biologics Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 158.00 in Bone Biologics Corp on September 1, 2024 and sell it today you would lose (36.00) from holding Bone Biologics Corp or give up 22.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outset Medical vs. Bone Biologics Corp
Performance |
| Timeline |
| Outset Medical |
| Bone Biologics Corp |
Outset Medical and Bone Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and Bone Biologics
The main advantage of trading using opposite Outset Medical and Bone Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, Bone Biologics 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 Bone Biologics will offset losses from the drop in Bone Biologics' long position.| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro Corp |
| Bone Biologics vs. Bluejay Diagnostics | Bone Biologics vs. Nuwellis | Bone Biologics vs. Heart Test Laboratories | Bone Biologics vs. Tivic Health Systems |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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