Correlation Between Ypsomed Holding and Straumann Holding
Can any of the company-specific risk be diversified away by investing in both Ypsomed Holding and Straumann Holding 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 Ypsomed Holding and Straumann Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ypsomed Holding AG and Straumann Holding AG, you can compare the effects of market volatilities on Ypsomed Holding and Straumann Holding 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 Ypsomed Holding with a short position of Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ypsomed Holding and Straumann Holding.
Diversification Opportunities for Ypsomed Holding and Straumann Holding
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ypsomed and Straumann is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ypsomed Holding AG and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Ypsomed 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 Ypsomed Holding AG are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Ypsomed Holding i.e., Ypsomed Holding and Straumann Holding go up and down completely randomly.
Pair Corralation between Ypsomed Holding and Straumann Holding
Assuming the 90 days trading horizon Ypsomed Holding AG is expected to generate 0.96 times more return on investment than Straumann Holding. However, Ypsomed Holding AG is 1.04 times less risky than Straumann Holding. It trades about 0.05 of its potential returns per unit of risk. Straumann Holding AG is currently generating about 0.01 per unit of risk. If you would invest 29,427 in Ypsomed Holding AG on September 2, 2024 and sell it today you would earn a total of 6,373 from holding Ypsomed Holding AG or generate 21.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ypsomed Holding AG vs. Straumann Holding AG
Performance |
| Timeline |
| Ypsomed Holding AG |
| Straumann Holding |
Ypsomed Holding and Straumann Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ypsomed Holding and Straumann Holding
The main advantage of trading using opposite Ypsomed Holding and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ypsomed Holding position performs unexpectedly, Straumann Holding 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.| Ypsomed Holding vs. Straumann Holding AG | Ypsomed Holding vs. Siegfried Holding | Ypsomed Holding vs. Bachem Holding AG | Ypsomed Holding vs. Tecan Group AG |
| Straumann Holding vs. Sonova H Ag | Straumann Holding vs. Sika AG | Straumann Holding vs. Lonza Group AG | Straumann Holding vs. Givaudan SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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