Correlation Between Sight Sciences and MSP Recovery
Can any of the company-specific risk be diversified away by investing in both Sight Sciences and MSP Recovery 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 MSP Recovery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sight Sciences and MSP Recovery, you can compare the effects of market volatilities on Sight Sciences and MSP Recovery 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 MSP Recovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sight Sciences and MSP Recovery.
Diversification Opportunities for Sight Sciences and MSP Recovery
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sight and MSP is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sight Sciences and MSP Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSP Recovery 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 MSP Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSP Recovery has no effect on the direction of Sight Sciences i.e., Sight Sciences and MSP Recovery go up and down completely randomly.
Pair Corralation between Sight Sciences and MSP Recovery
Given the investment horizon of 90 days Sight Sciences is expected to generate 0.5 times more return on investment than MSP Recovery. However, Sight Sciences is 2.0 times less risky than MSP Recovery. It trades about -0.17 of its potential returns per unit of risk. MSP Recovery is currently generating about -0.14 per unit of risk. If you would invest 500.00 in Sight Sciences on September 1, 2024 and sell it today you would lose (101.00) from holding Sight Sciences or give up 20.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sight Sciences vs. MSP Recovery
Performance |
| Timeline |
| Sight Sciences |
| MSP Recovery |
Sight Sciences and MSP Recovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sight Sciences and MSP Recovery
The main advantage of trading using opposite Sight Sciences and MSP Recovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sight Sciences position performs unexpectedly, MSP Recovery 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 MSP Recovery will offset losses from the drop in MSP Recovery's long position.| Sight Sciences vs. Profound Medical Corp | Sight Sciences vs. Si Bone | Sight Sciences vs. Nevro Corp | Sight Sciences vs. Paragon 28 |
| MSP Recovery vs. Profound Medical Corp | MSP Recovery vs. Si Bone | MSP Recovery vs. Sight Sciences | MSP Recovery vs. Nevro 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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