Correlation Between Laboratory and Sight Sciences

Can any of the company-specific risk be diversified away by investing in both Laboratory and Sight Sciences 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 Laboratory and Sight Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Laboratory of and Sight Sciences, you can compare the effects of market volatilities on Laboratory and Sight Sciences 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 Laboratory with a short position of Sight Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laboratory and Sight Sciences.

Diversification Opportunities for Laboratory and Sight Sciences

-0.79

Correlation Coefficient

Laboratory  Sight Sciences

Pay attention - limited upside

The 3 months correlation between Laboratory and Sight is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences and Laboratory 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 Laboratory of are associated (or correlated) with Sight Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sight Sciences has no effect on the direction of Laboratory i.e., Laboratory and Sight Sciences go up and down completely randomly.

Pair Corralation between Laboratory and Sight Sciences

Allowing for the 90-day total investment horizon Laboratory of is expected to generate 0.35 times more return on investment than Sight Sciences. However, Laboratory of is 2.87 times less risky than Sight Sciences. It trades about -0.15 of its potential returns per unit of risk. Sight Sciences is currently generating about -0.09 per unit of risk. If you would invest  23,451  in Laboratory of on September 16, 2024 and sell it today you would lose (717.00) from holding Laboratory of or give up 3.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Laboratory of  vs.  Sight Sciences

Laboratory

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Laboratory is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Sight Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sight Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Laboratory and Sight Sciences

The main advantage of trading using opposite Laboratory and Sight Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory position performs unexpectedly, Sight Sciences 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 Sight Sciences will offset losses from the drop in Sight Sciences' long position.

The idea behind Laboratory of and Sight 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.