Correlation Between STERIS Plc and Si Bone
Can any of the company-specific risk be diversified away by investing in both STERIS Plc and Si Bone 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 STERIS Plc and Si Bone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STERIS plc and Si Bone, you can compare the effects of market volatilities on STERIS Plc and Si Bone 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 STERIS Plc with a short position of Si Bone. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERIS Plc and Si Bone.
Diversification Opportunities for STERIS Plc and Si Bone
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STERIS and SIBN is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding STERIS plc and Si Bone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Si Bone and STERIS Plc 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 STERIS plc are associated (or correlated) with Si Bone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Si Bone has no effect on the direction of STERIS Plc i.e., STERIS Plc and Si Bone go up and down completely randomly.
Pair Corralation between STERIS Plc and Si Bone
Considering the 90-day investment horizon STERIS plc is expected to under-perform the Si Bone. But the stock apears to be less risky and, when comparing its historical volatility, STERIS plc is 3.44 times less risky than Si Bone. The stock trades about -0.1 of its potential returns per unit of risk. The Si Bone is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,227 in Si Bone on August 28, 2024 and sell it today you would earn a total of 38.00 from holding Si Bone or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
STERIS plc vs. Si Bone
Performance |
| Timeline |
| STERIS plc |
| Si Bone |
STERIS Plc and Si Bone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STERIS Plc and Si Bone
The main advantage of trading using opposite STERIS Plc and Si Bone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STERIS Plc position performs unexpectedly, Si Bone 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 Si Bone will offset losses from the drop in Si Bone's long position.| STERIS Plc vs. Orthofix Medical | STERIS Plc vs. Glaukos Corp | STERIS Plc vs. Bruker | STERIS Plc vs. CONMED |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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