Correlation Between Sonova Holding and GN Store
Can any of the company-specific risk be diversified away by investing in both Sonova Holding and GN Store 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 GN Store 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 GN Store Nord, you can compare the effects of market volatilities on Sonova Holding and GN Store 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 GN Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonova Holding and GN Store.
Diversification Opportunities for Sonova Holding and GN Store
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sonova and GNNDY is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sonova Holding AG and GN Store Nord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GN Store Nord 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 GN Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GN Store Nord has no effect on the direction of Sonova Holding i.e., Sonova Holding and GN Store go up and down completely randomly.
Pair Corralation between Sonova Holding and GN Store
Assuming the 90 days horizon Sonova Holding AG is expected to under-perform the GN Store. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sonova Holding AG is 1.21 times less risky than GN Store. The pink sheet trades about -0.28 of its potential returns per unit of risk. The GN Store Nord is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 5,842 in GN Store Nord on August 30, 2024 and sell it today you would lose (142.00) from holding GN Store Nord or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonova Holding AG vs. GN Store Nord
Performance |
| Timeline |
| Sonova Holding AG |
| GN Store Nord |
Sonova Holding and GN Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonova Holding and GN Store
The main advantage of trading using opposite Sonova Holding and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonova Holding position performs unexpectedly, GN Store 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 GN Store will offset losses from the drop in GN Store's long position.| Sonova Holding vs. GN Store Nord | Sonova Holding vs. GN Store Nord | Sonova Holding vs. Bone Biologics Corp | Sonova Holding vs. Smith Nephew plc |
| GN Store vs. Demant AS ADR | GN Store vs. Sonova Holding AG | GN Store vs. GN Store Nord | GN Store vs. Bone Biologics Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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