Correlation Between IRIDEX and NanoVibronix

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

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

Diversification Opportunities for IRIDEX and NanoVibronix

0.83

Correlation Coefficient

IRIDEX  NanoVibronix

Very poor diversification

The 3 months correlation between IRIDEX and NanoVibronix is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding IRIDEX and NanoVibronix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoVibronix 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 NanoVibronix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoVibronix has no effect on the direction of IRIDEX i.e., IRIDEX and NanoVibronix go up and down completely randomly.

Pair Corralation between IRIDEX and NanoVibronix

Given the investment horizon of 90 days IRIDEX is expected to generate 0.33 times more return on investment than NanoVibronix. However, IRIDEX is 3.05 times less risky than NanoVibronix. It trades about -0.11 of its potential returns per unit of risk. NanoVibronix is currently generating about -0.09 per unit of risk. If you would invest  179.00  in IRIDEX on November 28, 2024 and sell it today you would lose (39.00) from holding IRIDEX or give up 21.79% of portfolio value over 90 days.

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

IRIDEX  vs.  NanoVibronix

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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

NanoVibronix

Risk-Adjusted Performance

Very Weak

Over the last 90 days NanoVibronix 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 stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with IRIDEX and NanoVibronix

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

The idea behind IRIDEX and NanoVibronix 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.