Correlation Between Edgewise Therapeutics and STAAR Surgical
Can any of the company-specific risk be diversified away by investing in both Edgewise Therapeutics and STAAR Surgical 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 Edgewise Therapeutics and STAAR Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewise Therapeutics and STAAR Surgical, you can compare the effects of market volatilities on Edgewise Therapeutics and STAAR Surgical 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 Edgewise Therapeutics with a short position of STAAR Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewise Therapeutics and STAAR Surgical.
Diversification Opportunities for Edgewise Therapeutics and STAAR Surgical
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edgewise and STAAR is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Edgewise Therapeutics and STAAR Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAAR Surgical and Edgewise Therapeutics 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 Edgewise Therapeutics are associated (or correlated) with STAAR Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAAR Surgical has no effect on the direction of Edgewise Therapeutics i.e., Edgewise Therapeutics and STAAR Surgical go up and down completely randomly.
Pair Corralation between Edgewise Therapeutics and STAAR Surgical
Given the investment horizon of 90 days Edgewise Therapeutics is expected to generate 1.43 times more return on investment than STAAR Surgical. However, Edgewise Therapeutics is 1.43 times more volatile than STAAR Surgical. It trades about 0.08 of its potential returns per unit of risk. STAAR Surgical is currently generating about 0.02 per unit of risk. If you would invest 1,783 in Edgewise Therapeutics on August 28, 2024 and sell it today you would earn a total of 1,415 from holding Edgewise Therapeutics or generate 79.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewise Therapeutics vs. STAAR Surgical
Performance |
| Timeline |
| Edgewise Therapeutics |
| STAAR Surgical |
Edgewise Therapeutics and STAAR Surgical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewise Therapeutics and STAAR Surgical
The main advantage of trading using opposite Edgewise Therapeutics and STAAR Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewise Therapeutics position performs unexpectedly, STAAR Surgical 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 STAAR Surgical will offset losses from the drop in STAAR Surgical's long position.| Edgewise Therapeutics vs. Eliem Therapeutics | Edgewise Therapeutics vs. HCW Biologics | Edgewise Therapeutics vs. Scpharmaceuticals | Edgewise Therapeutics vs. Milestone Pharmaceuticals |
| STAAR Surgical vs. ResMed Inc | STAAR Surgical vs. West Pharmaceutical Services | STAAR Surgical vs. ICU Medical | STAAR Surgical vs. Merit Medical Systems |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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