Correlation Between Figs and STAAR Surgical
Can any of the company-specific risk be diversified away by investing in both Figs 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 Figs and STAAR Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and STAAR Surgical, you can compare the effects of market volatilities on Figs 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 Figs with a short position of STAAR Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and STAAR Surgical.
Diversification Opportunities for Figs and STAAR Surgical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Figs and STAAR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and STAAR Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAAR Surgical 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 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 Figs i.e., Figs and STAAR Surgical go up and down completely randomly.
Pair Corralation between Figs and STAAR Surgical
Given the investment horizon of 90 days Figs Inc is expected to generate 1.13 times more return on investment than STAAR Surgical. However, Figs is 1.13 times more volatile than STAAR Surgical. It trades about 0.0 of its potential returns per unit of risk. STAAR Surgical is currently generating about -0.03 per unit of risk. If you would invest 779.00 in Figs Inc on August 28, 2024 and sell it today you would lose (281.00) from holding Figs Inc or give up 36.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. STAAR Surgical
Performance |
| Timeline |
| Figs Inc |
| STAAR Surgical |
Figs and STAAR Surgical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and STAAR Surgical
The main advantage of trading using opposite Figs and STAAR Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs 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.The idea behind Figs Inc and STAAR Surgical 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.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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