Correlation Between Si Bone and Integer Holdings
Can any of the company-specific risk be diversified away by investing in both Si Bone and Integer Holdings 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 Integer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Si Bone and Integer Holdings Corp, you can compare the effects of market volatilities on Si Bone and Integer Holdings 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 Integer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Si Bone and Integer Holdings.
Diversification Opportunities for Si Bone and Integer Holdings
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SIBN and Integer is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Si Bone and Integer Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integer Holdings Corp 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 Integer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integer Holdings Corp has no effect on the direction of Si Bone i.e., Si Bone and Integer Holdings go up and down completely randomly.
Pair Corralation between Si Bone and Integer Holdings
Given the investment horizon of 90 days Si Bone is expected to generate 3.0 times less return on investment than Integer Holdings. In addition to that, Si Bone is 1.61 times more volatile than Integer Holdings Corp. It trades about 0.02 of its total potential returns per unit of risk. Integer Holdings Corp is currently generating about 0.08 per unit of volatility. If you would invest 7,273 in Integer Holdings Corp on August 29, 2024 and sell it today you would earn a total of 6,605 from holding Integer Holdings Corp or generate 90.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Si Bone vs. Integer Holdings Corp
Performance |
| Timeline |
| Si Bone |
| Integer Holdings Corp |
Si Bone and Integer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Si Bone and Integer Holdings
The main advantage of trading using opposite Si Bone and Integer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Si Bone position performs unexpectedly, Integer Holdings 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 Integer Holdings will offset losses from the drop in Integer Holdings' long position.The idea behind Si Bone and Integer Holdings Corp 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.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 Stocks Directory module to find actively traded stocks across global markets.
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