Correlation Between Sight Sciences and STRATA Skin
Can any of the company-specific risk be diversified away by investing in both Sight Sciences and STRATA Skin 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 STRATA Skin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sight Sciences and STRATA Skin Sciences, you can compare the effects of market volatilities on Sight Sciences and STRATA Skin 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 STRATA Skin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sight Sciences and STRATA Skin.
Diversification Opportunities for Sight Sciences and STRATA Skin
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sight and STRATA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sight Sciences and STRATA Skin Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATA Skin Sciences 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 STRATA Skin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATA Skin Sciences has no effect on the direction of Sight Sciences i.e., Sight Sciences and STRATA Skin go up and down completely randomly.
Pair Corralation between Sight Sciences and STRATA Skin
Given the investment horizon of 90 days Sight Sciences is expected to under-perform the STRATA Skin. In addition to that, Sight Sciences is 1.5 times more volatile than STRATA Skin Sciences. It trades about -0.29 of its total potential returns per unit of risk. STRATA Skin Sciences is currently generating about 0.05 per unit of volatility. If you would invest 302.00 in STRATA Skin Sciences on August 24, 2024 and sell it today you would earn a total of 8.00 from holding STRATA Skin Sciences or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sight Sciences vs. STRATA Skin Sciences
Performance |
| Timeline |
| Sight Sciences |
| STRATA Skin Sciences |
Sight Sciences and STRATA Skin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sight Sciences and STRATA Skin
The main advantage of trading using opposite Sight Sciences and STRATA Skin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sight Sciences position performs unexpectedly, STRATA Skin 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 STRATA Skin will offset losses from the drop in STRATA Skin'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 |
| STRATA Skin vs. Axogen Inc | STRATA Skin vs. Ainos Inc | STRATA Skin vs. LENSAR Inc | STRATA Skin vs. Nexalin Technology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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