Correlation Between Eyenovia and Scorpius Holdings

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

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

Diversification Opportunities for Eyenovia and Scorpius Holdings

0.84

Correlation Coefficient

Eyenovia  Scorpius Holdings

Very poor diversification

The 3 months correlation between Eyenovia and Scorpius is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eyenovia and Scorpius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scorpius Holdings and Eyenovia 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 Eyenovia are associated (or correlated) with Scorpius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scorpius Holdings has no effect on the direction of Eyenovia i.e., Eyenovia and Scorpius Holdings go up and down completely randomly.

Pair Corralation between Eyenovia and Scorpius Holdings

Given the investment horizon of 90 days Eyenovia is expected to under-perform the Scorpius Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Eyenovia is 1.16 times less risky than Scorpius Holdings. The stock trades about -0.19 of its potential returns per unit of risk. The Scorpius Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  31.00  in Scorpius Holdings on December 22, 2024 and sell it today you would lose (14.00) from holding Scorpius Holdings or give up 45.16% of portfolio value over 90 days.

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

Eyenovia  vs.  Scorpius Holdings

Eyenovia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eyenovia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Scorpius Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scorpius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Eyenovia and Scorpius Holdings

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

The idea behind Eyenovia and Scorpius Holdings 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.