Correlation Between Sight Sciences and Establishment Labs
Can any of the company-specific risk be diversified away by investing in both Sight Sciences and Establishment Labs 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 Establishment Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sight Sciences and Establishment Labs Holdings, you can compare the effects of market volatilities on Sight Sciences and Establishment Labs 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 Establishment Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sight Sciences and Establishment Labs.
Diversification Opportunities for Sight Sciences and Establishment Labs
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sight and Establishment is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sight Sciences and Establishment Labs Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Establishment Labs 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 Establishment Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Establishment Labs has no effect on the direction of Sight Sciences i.e., Sight Sciences and Establishment Labs go up and down completely randomly.
Pair Corralation between Sight Sciences and Establishment Labs
Given the investment horizon of 90 days Sight Sciences is expected to generate 0.51 times more return on investment than Establishment Labs. However, Sight Sciences is 1.96 times less risky than Establishment Labs. It trades about -0.28 of its potential returns per unit of risk. Establishment Labs Holdings is currently generating about -0.26 per unit of risk. If you would invest 340.00 in Sight Sciences on November 7, 2024 and sell it today you would lose (60.00) from holding Sight Sciences or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sight Sciences vs. Establishment Labs Holdings
Performance |
| Timeline |
| Sight Sciences |
| Establishment Labs |
Sight Sciences and Establishment Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sight Sciences and Establishment Labs
The main advantage of trading using opposite Sight Sciences and Establishment Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sight Sciences position performs unexpectedly, Establishment Labs 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 Establishment Labs will offset losses from the drop in Establishment Labs' long position.| Sight Sciences vs. Si Bone | Sight Sciences vs. Rapid Micro Biosystems | Sight Sciences vs. Tactile Systems Technology | Sight Sciences vs. Pulmonx Corp |
| Establishment Labs vs. Orthopediatrics Corp | Establishment Labs vs. Integer Holdings Corp | Establishment Labs vs. Treace Medical Concepts | Establishment Labs vs. CONMED |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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