Correlation Between Figs and Sensus Healthcare
Can any of the company-specific risk be diversified away by investing in both Figs and Sensus Healthcare 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 Figs and Sensus Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and Sensus Healthcare, you can compare the effects of market volatilities on Figs and Sensus Healthcare 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 Figs with a short position of Sensus Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Sensus Healthcare.
Diversification Opportunities for Figs and Sensus Healthcare
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Figs and Sensus is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Sensus Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensus Healthcare and Figs 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 Figs Inc are associated (or correlated) with Sensus Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensus Healthcare has no effect on the direction of Figs i.e., Figs and Sensus Healthcare go up and down completely randomly.
Pair Corralation between Figs and Sensus Healthcare
Given the investment horizon of 90 days Figs Inc is expected to under-perform the Sensus Healthcare. In addition to that, Figs is 1.3 times more volatile than Sensus Healthcare. It trades about -0.06 of its total potential returns per unit of risk. Sensus Healthcare is currently generating about 0.11 per unit of volatility. If you would invest 660.00 in Sensus Healthcare on August 27, 2024 and sell it today you would earn a total of 229.00 from holding Sensus Healthcare or generate 34.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. Sensus Healthcare
Performance |
| Timeline |
| Figs Inc |
| Sensus Healthcare |
Figs and Sensus Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and Sensus Healthcare
The main advantage of trading using opposite Figs and Sensus Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs position performs unexpectedly, Sensus Healthcare 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 Sensus Healthcare will offset losses from the drop in Sensus Healthcare's long position.The idea behind Figs Inc and Sensus Healthcare 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.| Sensus Healthcare vs. Ainos Inc | Sensus Healthcare vs. SurModics | Sensus Healthcare vs. LENSAR Inc | Sensus Healthcare vs. IRIDEX |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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