Correlation Between Sientra and STRATA Skin
Can any of the company-specific risk be diversified away by investing in both Sientra 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 Sientra and STRATA Skin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sientra and STRATA Skin Sciences, you can compare the effects of market volatilities on Sientra 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 Sientra with a short position of STRATA Skin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sientra and STRATA Skin.
Diversification Opportunities for Sientra and STRATA Skin
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sientra and STRATA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sientra 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 Sientra 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 Sientra 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 Sientra i.e., Sientra and STRATA Skin go up and down completely randomly.
Pair Corralation between Sientra and STRATA Skin
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 | 4.35% |
| Values | Daily Returns |
Sientra vs. STRATA Skin Sciences
Performance |
| Timeline |
| Sientra |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| STRATA Skin Sciences |
Sientra and STRATA Skin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sientra and STRATA Skin
The main advantage of trading using opposite Sientra and STRATA Skin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sientra 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.The idea behind Sientra and STRATA Skin Sciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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