Correlation Between IRIDEX and Sight Sciences
Can any of the company-specific risk be diversified away by investing in both IRIDEX 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 IRIDEX and Sight Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IRIDEX and Sight Sciences, you can compare the effects of market volatilities on IRIDEX 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 IRIDEX with a short position of Sight Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRIDEX and Sight Sciences.
Diversification Opportunities for IRIDEX and Sight Sciences
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IRIDEX and Sight is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding IRIDEX and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences and IRIDEX 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 IRIDEX 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 IRIDEX i.e., IRIDEX and Sight Sciences go up and down completely randomly.
Pair Corralation between IRIDEX and Sight Sciences
Given the investment horizon of 90 days IRIDEX is expected to generate 1.57 times more return on investment than Sight Sciences. However, IRIDEX is 1.57 times more volatile than Sight Sciences. It trades about 0.1 of its potential returns per unit of risk. Sight Sciences is currently generating about -0.29 per unit of risk. If you would invest 154.00 in IRIDEX on August 24, 2024 and sell it today you would earn a total of 18.00 from holding IRIDEX or generate 11.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IRIDEX vs. Sight Sciences
Performance |
| Timeline |
| IRIDEX |
| Sight Sciences |
IRIDEX and Sight Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRIDEX and Sight Sciences
The main advantage of trading using opposite IRIDEX and Sight Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRIDEX 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.The idea behind IRIDEX and Sight Sciences 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.| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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