Correlation Between Glaukos Corp and Butterfly Network

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

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

Diversification Opportunities for Glaukos Corp and Butterfly Network

0.76

Correlation Coefficient

Glaukos Corp  Butterfly Network

Poor diversification

The 3 months correlation between Glaukos and Butterfly is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Glaukos Corp and Butterfly Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Butterfly Network and Glaukos Corp 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 Glaukos Corp are associated (or correlated) with Butterfly Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Butterfly Network has no effect on the direction of Glaukos Corp i.e., Glaukos Corp and Butterfly Network go up and down completely randomly.

Pair Corralation between Glaukos Corp and Butterfly Network

Given the investment horizon of 90 days Glaukos Corp is expected to under-perform the Butterfly Network. But the stock apears to be less risky and, when comparing its historical volatility, Glaukos Corp is 1.85 times less risky than Butterfly Network. The stock trades about -0.14 of its potential returns per unit of risk. The Butterfly Network is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  323.00  in Butterfly Network on December 30, 2024 and sell it today you would lose (86.00) from holding Butterfly Network or give up 26.63% of portfolio value over 90 days.

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

Glaukos Corp  vs.  Butterfly Network

Glaukos Corp

Risk-Adjusted Performance

Very Weak

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

Butterfly Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days Butterfly Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential 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 Glaukos Corp and Butterfly Network

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

The idea behind Glaukos Corp and Butterfly Network 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.