Correlation Between Sonova Holding and Aurora Spine
Can any of the company-specific risk be diversified away by investing in both Sonova Holding and Aurora Spine 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 Sonova Holding and Aurora Spine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonova Holding AG and Aurora Spine, you can compare the effects of market volatilities on Sonova Holding and Aurora Spine 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 Sonova Holding with a short position of Aurora Spine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonova Holding and Aurora Spine.
Diversification Opportunities for Sonova Holding and Aurora Spine
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sonova and Aurora is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sonova Holding AG and Aurora Spine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Spine and Sonova Holding 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 Sonova Holding AG are associated (or correlated) with Aurora Spine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Spine has no effect on the direction of Sonova Holding i.e., Sonova Holding and Aurora Spine go up and down completely randomly.
Pair Corralation between Sonova Holding and Aurora Spine
Assuming the 90 days horizon Sonova Holding is expected to generate 1.45 times less return on investment than Aurora Spine. But when comparing it to its historical volatility, Sonova Holding AG is 2.95 times less risky than Aurora Spine. It trades about 0.04 of its potential returns per unit of risk. Aurora Spine is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Aurora Spine on September 2, 2024 and sell it today you would lose (3.00) from holding Aurora Spine or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonova Holding AG vs. Aurora Spine
Performance |
| Timeline |
| Sonova Holding AG |
| Aurora Spine |
Sonova Holding and Aurora Spine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonova Holding and Aurora Spine
The main advantage of trading using opposite Sonova Holding and Aurora Spine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonova Holding position performs unexpectedly, Aurora Spine 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 Aurora Spine will offset losses from the drop in Aurora Spine's long position.| Sonova Holding vs. Medtronic PLC | Sonova Holding vs. CONMED | Sonova Holding vs. Glaukos Corp | Sonova Holding vs. Integer Holdings Corp |
| Aurora Spine vs. Armm Inc | Aurora Spine vs. Cellink AB | Aurora Spine vs. Bone Biologics Corp | Aurora Spine vs. BICO Group AB |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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