Correlation Between Sight Sciences and Danaher
Can any of the company-specific risk be diversified away by investing in both Sight Sciences and Danaher 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 Sight Sciences and Danaher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sight Sciences and Danaher, you can compare the effects of market volatilities on Sight Sciences and Danaher 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 Sight Sciences with a short position of Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sight Sciences and Danaher.
Diversification Opportunities for Sight Sciences and Danaher
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sight and Danaher is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sight Sciences and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher and Sight Sciences 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 Sight Sciences are associated (or correlated) with Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of Sight Sciences i.e., Sight Sciences and Danaher go up and down completely randomly.
Pair Corralation between Sight Sciences and Danaher
Given the investment horizon of 90 days Sight Sciences is expected to generate 4.05 times more return on investment than Danaher. However, Sight Sciences is 4.05 times more volatile than Danaher. It trades about 0.06 of its potential returns per unit of risk. Danaher is currently generating about 0.04 per unit of risk. If you would invest 228.00 in Sight Sciences on September 14, 2024 and sell it today you would earn a total of 128.00 from holding Sight Sciences or generate 56.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sight Sciences vs. Danaher
Performance |
| Timeline |
| Sight Sciences |
| Danaher |
Sight Sciences and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sight Sciences and Danaher
The main advantage of trading using opposite Sight Sciences and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sight Sciences position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| Sight Sciences vs. Si Bone | Sight Sciences vs. Rapid Micro Biosystems | Sight Sciences vs. Tactile Systems Technology | Sight Sciences vs. Pulmonx Corp |
| Danaher vs. Avita Medical | Danaher vs. Sight Sciences | Danaher vs. Treace Medical Concepts | Danaher vs. Neuropace |
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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