Correlation Between Bone Biologics and Myomo

Can any of the company-specific risk be diversified away by investing in both Bone Biologics and Myomo 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 Bone Biologics and Myomo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bone Biologics Corp and Myomo Inc, you can compare the effects of market volatilities on Bone Biologics and Myomo 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 Bone Biologics with a short position of Myomo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bone Biologics and Myomo.

Diversification Opportunities for Bone Biologics and Myomo

-0.49

Correlation Coefficient

Bone Biologics  Myomo

Very good diversification

The 3 months correlation between Bone and Myomo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bone Biologics Corp and Myomo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myomo Inc and Bone Biologics 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 Bone Biologics Corp are associated (or correlated) with Myomo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myomo Inc has no effect on the direction of Bone Biologics i.e., Bone Biologics and Myomo go up and down completely randomly.

Pair Corralation between Bone Biologics and Myomo

Given the investment horizon of 90 days Bone Biologics Corp is expected to under-perform the Myomo. In addition to that, Bone Biologics is 2.05 times more volatile than Myomo Inc. It trades about -0.1 of its total potential returns per unit of risk. Myomo Inc is currently generating about 0.16 per unit of volatility. If you would invest  401.00  in Myomo Inc on August 31, 2024 and sell it today you would earn a total of  121.00  from holding Myomo Inc or generate 30.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bone Biologics Corp  vs.  Myomo Inc

Bone Biologics Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bone Biologics Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Bone Biologics reported solid returns over the last few months and may actually be approaching a breakup point.

Myomo Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Myomo Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Myomo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bone Biologics and Myomo

The main advantage of trading using opposite Bone Biologics and Myomo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bone Biologics position performs unexpectedly, Myomo 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 Myomo will offset losses from the drop in Myomo's long position.

The idea behind Bone Biologics Corp and Myomo Inc 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.

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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..