Correlation Between Integra LifeSciences and Senseonics Holdings

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

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

Diversification Opportunities for Integra LifeSciences and Senseonics Holdings

-0.22

Correlation Coefficient

Integra LifeSciences  Senseonics Holdings

Very good diversification

The 3 months correlation between Integra and Senseonics is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Integra LifeSciences Holdings and Senseonics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senseonics Holdings and Integra LifeSciences 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 Integra LifeSciences Holdings are associated (or correlated) with Senseonics Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senseonics Holdings has no effect on the direction of Integra LifeSciences i.e., Integra LifeSciences and Senseonics Holdings go up and down completely randomly.

Pair Corralation between Integra LifeSciences and Senseonics Holdings

Given the investment horizon of 90 days Integra LifeSciences Holdings is expected to under-perform the Senseonics Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Integra LifeSciences Holdings is 4.36 times less risky than Senseonics Holdings. The stock trades about -0.2 of its potential returns per unit of risk. The Senseonics Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  32.00  in Senseonics Holdings on September 23, 2024 and sell it today you would earn a total of  14.00  from holding Senseonics Holdings or generate 43.75% return on investment over 90 days.

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

Integra LifeSciences Holdings  vs.  Senseonics Holdings

Integra LifeSciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integra LifeSciences Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Integra LifeSciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Senseonics Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Senseonics Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Senseonics Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integra LifeSciences and Senseonics Holdings

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

The idea behind Integra LifeSciences Holdings and Senseonics Holdings 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.