Correlation Between IRIDEX and Escalon Medical

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

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

Diversification Opportunities for IRIDEX and Escalon Medical

0.0

Correlation Coefficient

IRIDEX  Escalon Medical

Pay attention - limited upside

The 3 months correlation between IRIDEX and Escalon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IRIDEX and Escalon Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalon Medical Corp and IRIDEX 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 IRIDEX are associated (or correlated) with Escalon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Escalon Medical Corp has no effect on the direction of IRIDEX i.e., IRIDEX and Escalon Medical go up and down completely randomly.

Pair Corralation between IRIDEX and Escalon Medical

If you would invest (100.00) in Escalon Medical Corp on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Escalon Medical Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

IRIDEX  vs.  Escalon Medical Corp

IRIDEX

Risk-Adjusted Performance

Very Weak

Over the last 90 days IRIDEX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward 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.

Escalon Medical Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Escalon Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Escalon Medical is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IRIDEX and Escalon Medical

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

The idea behind IRIDEX and Escalon Medical Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.