Correlation Between Straumann Holding and GlucoTrack

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

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

Diversification Opportunities for Straumann Holding and GlucoTrack

0.78

Correlation Coefficient

Straumann Holding  GlucoTrack

Poor diversification

The 3 months correlation between Straumann and GlucoTrack is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and GlucoTrack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlucoTrack and Straumann 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 Straumann Holding AG are associated (or correlated) with GlucoTrack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlucoTrack has no effect on the direction of Straumann Holding i.e., Straumann Holding and GlucoTrack go up and down completely randomly.

Pair Corralation between Straumann Holding and GlucoTrack

Assuming the 90 days horizon Straumann Holding is expected to generate 4.22 times less return on investment than GlucoTrack. But when comparing it to its historical volatility, Straumann Holding AG is 7.28 times less risky than GlucoTrack. It trades about 0.03 of its potential returns per unit of risk. GlucoTrack is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  735.00  in GlucoTrack on September 12, 2024 and sell it today you would lose (706.50) from holding GlucoTrack or give up 96.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Straumann Holding AG  vs.  GlucoTrack

Straumann Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Straumann Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Straumann Holding is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

GlucoTrack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GlucoTrack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Straumann Holding and GlucoTrack

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

The idea behind Straumann Holding AG and GlucoTrack 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.