Correlation Between Glaukos Corp and Masimo

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

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

Diversification Opportunities for Glaukos Corp and Masimo

0.21

Correlation Coefficient

Glaukos Corp  Masimo

Modest diversification

The 3 months correlation between Glaukos and Masimo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Glaukos Corp and Masimo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masimo 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 Masimo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masimo has no effect on the direction of Glaukos Corp i.e., Glaukos Corp and Masimo go up and down completely randomly.

Pair Corralation between Glaukos Corp and Masimo

Given the investment horizon of 90 days Glaukos Corp is expected to under-perform the Masimo. In addition to that, Glaukos Corp is 2.01 times more volatile than Masimo. It trades about -0.07 of its total potential returns per unit of risk. Masimo is currently generating about -0.01 per unit of volatility. If you would invest  17,254  in Masimo on November 28, 2024 and sell it today you would lose (300.00) from holding Masimo or give up 1.74% of portfolio value over 90 days.

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

Glaukos Corp  vs.  Masimo

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 March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Masimo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Masimo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Masimo is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Glaukos Corp and Masimo

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

The idea behind Glaukos Corp and Masimo 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 Commodity Directory module to find actively traded commodities issued by global exchanges.