Correlation Between Establishment Labs and Sight Sciences
Can any of the company-specific risk be diversified away by investing in both Establishment Labs and Sight Sciences 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 Establishment Labs and Sight Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Establishment Labs Holdings and Sight Sciences, you can compare the effects of market volatilities on Establishment Labs and Sight Sciences 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 Establishment Labs with a short position of Sight Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Establishment Labs and Sight Sciences.
Diversification Opportunities for Establishment Labs and Sight Sciences
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Establishment and Sight is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Establishment Labs Holdings and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences and Establishment Labs 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 Establishment Labs Holdings are associated (or correlated) with Sight Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sight Sciences has no effect on the direction of Establishment Labs i.e., Establishment Labs and Sight Sciences go up and down completely randomly.
Pair Corralation between Establishment Labs and Sight Sciences
Given the investment horizon of 90 days Establishment Labs Holdings is expected to under-perform the Sight Sciences. In addition to that, Establishment Labs is 1.96 times more volatile than Sight Sciences. It trades about -0.26 of its total potential returns per unit of risk. Sight Sciences is currently generating about -0.28 per unit of volatility. If you would invest 340.00 in Sight Sciences on November 7, 2024 and sell it today you would lose (60.00) from holding Sight Sciences or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Establishment Labs Holdings vs. Sight Sciences
Performance |
| Timeline |
| Establishment Labs |
| Sight Sciences |
Establishment Labs and Sight Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Establishment Labs and Sight Sciences
The main advantage of trading using opposite Establishment Labs and Sight Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Establishment Labs position performs unexpectedly, Sight Sciences 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 Sight Sciences will offset losses from the drop in Sight Sciences' long position.| Establishment Labs vs. Orthopediatrics Corp | Establishment Labs vs. Integer Holdings Corp | Establishment Labs vs. Treace Medical Concepts | Establishment Labs vs. CONMED |
| Sight Sciences vs. Si Bone | Sight Sciences vs. Rapid Micro Biosystems | Sight Sciences vs. Tactile Systems Technology | Sight Sciences vs. Pulmonx Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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