Correlation Between Penumbra and Bone Biologics
Can any of the company-specific risk be diversified away by investing in both Penumbra 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 Penumbra and Bone Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penumbra and Bone Biologics Corp, you can compare the effects of market volatilities on Penumbra 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 Penumbra with a short position of Bone Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penumbra and Bone Biologics.
Diversification Opportunities for Penumbra and Bone Biologics
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Penumbra and Bone is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Penumbra 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 Penumbra 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 Penumbra 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 Penumbra i.e., Penumbra and Bone Biologics go up and down completely randomly.
Pair Corralation between Penumbra and Bone Biologics
Considering the 90-day investment horizon Penumbra is expected to generate 100.66 times less return on investment than Bone Biologics. But when comparing it to its historical volatility, Penumbra is 20.37 times less risky than Bone Biologics. It trades about 0.02 of its potential returns per unit of risk. Bone Biologics Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Bone Biologics Corp on September 3, 2024 and sell it today you would earn a total of 2,777 from holding Bone Biologics Corp or generate 92566.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penumbra vs. Bone Biologics Corp
Performance |
| Timeline |
| Penumbra |
| Bone Biologics Corp |
Penumbra and Bone Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penumbra and Bone Biologics
The main advantage of trading using opposite Penumbra and Bone Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penumbra 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.| Penumbra vs. Insulet | Penumbra vs. TransMedics Group | Penumbra vs. Masimo | Penumbra vs. Inspire Medical Systems |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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