Correlation Between Sonova H and Straumann Holding

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

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

Diversification Opportunities for Sonova H and Straumann Holding

0.59

Correlation Coefficient

Sonova H  Straumann Holding

Very weak diversification

The 3 months correlation between Sonova and Straumann is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sonova H 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 Sonova H 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 Sonova H 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 Sonova H i.e., Sonova H and Straumann Holding go up and down completely randomly.

Pair Corralation between Sonova H and Straumann Holding

Assuming the 90 days trading horizon Sonova H is expected to generate 7.03 times less return on investment than Straumann Holding. But when comparing it to its historical volatility, Sonova H Ag is 1.28 times less risky than Straumann Holding. It trades about 0.02 of its potential returns per unit of risk. Straumann Holding AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,712  in Straumann Holding AG on April 22, 2025 and sell it today you would earn a total of  863.00  from holding Straumann Holding AG or generate 8.89% return on investment over 90 days.

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

Sonova H Ag  vs.  Straumann Holding AG

Sonova H Ag

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sonova H Ag are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Sonova H is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Straumann Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Straumann Holding AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Straumann Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Sonova H and Straumann Holding

The main advantage of trading using opposite Sonova H and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonova H 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.

The idea behind Sonova H Ag and Straumann Holding AG 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.