Correlation Between Si Bone and Aziyo Biologics
Can any of the company-specific risk be diversified away by investing in both Si Bone and Aziyo 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 Si Bone and Aziyo Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Si Bone and Aziyo Biologics, you can compare the effects of market volatilities on Si Bone and Aziyo 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 Si Bone with a short position of Aziyo Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Si Bone and Aziyo Biologics.
Diversification Opportunities for Si Bone and Aziyo Biologics
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SIBN and Aziyo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Si Bone and Aziyo Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aziyo Biologics and Si Bone 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 Si Bone are associated (or correlated) with Aziyo Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aziyo Biologics has no effect on the direction of Si Bone i.e., Si Bone and Aziyo Biologics go up and down completely randomly.
Pair Corralation between Si Bone and Aziyo Biologics
Given the investment horizon of 90 days Si Bone is expected to under-perform the Aziyo Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Si Bone is 1.78 times less risky than Aziyo Biologics. The stock trades about -0.02 of its potential returns per unit of risk. The Aziyo Biologics is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 145.00 in Aziyo Biologics on August 24, 2024 and sell it today you would earn a total of 99.00 from holding Aziyo Biologics or generate 68.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 18.8% |
| Values | Daily Returns |
Si Bone vs. Aziyo Biologics
Performance |
| Timeline |
| Si Bone |
| Aziyo Biologics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Si Bone and Aziyo Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Si Bone and Aziyo Biologics
The main advantage of trading using opposite Si Bone and Aziyo Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Si Bone position performs unexpectedly, Aziyo 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 Aziyo Biologics will offset losses from the drop in Aziyo Biologics' long position.The idea behind Si Bone and Aziyo Biologics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aziyo Biologics vs. Ainos Inc | Aziyo Biologics vs. SurModics | Aziyo Biologics vs. LENSAR Inc | Aziyo Biologics vs. IRIDEX |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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