Correlation Between Avita Medical and IRIDEX
Can any of the company-specific risk be diversified away by investing in both Avita Medical and IRIDEX 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 Avita Medical and IRIDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and IRIDEX, you can compare the effects of market volatilities on Avita Medical and IRIDEX 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 Avita Medical with a short position of IRIDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and IRIDEX.
Diversification Opportunities for Avita Medical and IRIDEX
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Avita and IRIDEX is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical and IRIDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRIDEX and Avita Medical 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 Avita Medical are associated (or correlated) with IRIDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRIDEX has no effect on the direction of Avita Medical i.e., Avita Medical and IRIDEX go up and down completely randomly.
Pair Corralation between Avita Medical and IRIDEX
Given the investment horizon of 90 days Avita Medical is expected to generate 1.02 times more return on investment than IRIDEX. However, Avita Medical is 1.02 times more volatile than IRIDEX. It trades about 0.05 of its potential returns per unit of risk. IRIDEX is currently generating about 0.01 per unit of risk. If you would invest 652.00 in Avita Medical on August 24, 2024 and sell it today you would earn a total of 682.00 from holding Avita Medical or generate 104.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avita Medical vs. IRIDEX
Performance |
| Timeline |
| Avita Medical |
| IRIDEX |
Avita Medical and IRIDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avita Medical and IRIDEX
The main advantage of trading using opposite Avita Medical and IRIDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical position performs unexpectedly, IRIDEX 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 IRIDEX will offset losses from the drop in IRIDEX's long position.| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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