Correlation Between JonDeTech Sensors and Bonesupport Holding

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

By analyzing existing cross correlation between JonDeTech Sensors and Bonesupport Holding AB, you can compare the effects of market volatilities on JonDeTech Sensors and Bonesupport 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 JonDeTech Sensors with a short position of Bonesupport Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of JonDeTech Sensors and Bonesupport Holding.

Diversification Opportunities for JonDeTech Sensors and Bonesupport Holding

-0.69

Correlation Coefficient

JonDeTech Sensors  Bonesupport Holding

Excellent diversification

The 3 months correlation between JonDeTech and Bonesupport is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding JonDeTech Sensors and Bonesupport Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonesupport Holding and JonDeTech Sensors 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 JonDeTech Sensors are associated (or correlated) with Bonesupport Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonesupport Holding has no effect on the direction of JonDeTech Sensors i.e., JonDeTech Sensors and Bonesupport Holding go up and down completely randomly.

Pair Corralation between JonDeTech Sensors and Bonesupport Holding

Assuming the 90 days trading horizon JonDeTech Sensors is expected to under-perform the Bonesupport Holding. In addition to that, JonDeTech Sensors is 2.26 times more volatile than Bonesupport Holding AB. It trades about -0.16 of its total potential returns per unit of risk. Bonesupport Holding AB is currently generating about 0.08 per unit of volatility. If you would invest  31,420  in Bonesupport Holding AB on September 15, 2024 and sell it today you would earn a total of  3,940  from holding Bonesupport Holding AB or generate 12.54% return on investment over 90 days.

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

JonDeTech Sensors  vs.  Bonesupport Holding AB

JonDeTech Sensors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JonDeTech Sensors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bonesupport Holding

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bonesupport Holding AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bonesupport Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JonDeTech Sensors and Bonesupport Holding

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

The idea behind JonDeTech Sensors and Bonesupport Holding AB 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.