Correlation Between Straumann Holding and Neurones

Can any of the company-specific risk be diversified away by investing in both Straumann Holding and Neurones 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 Neurones 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 Neurones, you can compare the effects of market volatilities on Straumann Holding and Neurones 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 Neurones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Neurones.

Diversification Opportunities for Straumann Holding and Neurones

-0.26

Correlation Coefficient

Straumann Holding  Neurones

Very good diversification

The 3 months correlation between Straumann and Neurones is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Neurones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neurones 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 Neurones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neurones has no effect on the direction of Straumann Holding i.e., Straumann Holding and Neurones go up and down completely randomly.

Pair Corralation between Straumann Holding and Neurones

Assuming the 90 days trading horizon Straumann Holding AG is expected to under-perform the Neurones. In addition to that, Straumann Holding is 2.0 times more volatile than Neurones. It trades about -0.04 of its total potential returns per unit of risk. Neurones is currently generating about 0.08 per unit of volatility. If you would invest  4,290  in Neurones on September 3, 2024 and sell it today you would earn a total of  200.00  from holding Neurones or generate 4.66% return on investment over 90 days.

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

Straumann Holding AG  vs.  Neurones

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 stable basic indicators, Straumann Holding is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Neurones

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Neurones are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Neurones is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Straumann Holding and Neurones

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

The idea behind Straumann Holding AG and Neurones 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.