Correlation Between IRIDEX and Owlet

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

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

Diversification Opportunities for IRIDEX and Owlet

-0.58

Correlation Coefficient

IRIDEX  Owlet

Excellent diversification

The 3 months correlation between IRIDEX and Owlet is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding IRIDEX and Owlet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owlet Inc 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 Owlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owlet Inc has no effect on the direction of IRIDEX i.e., IRIDEX and Owlet go up and down completely randomly.

Pair Corralation between IRIDEX and Owlet

Given the investment horizon of 90 days IRIDEX is expected to under-perform the Owlet. In addition to that, IRIDEX is 1.21 times more volatile than Owlet Inc. It trades about -0.02 of its total potential returns per unit of risk. Owlet Inc is currently generating about 0.12 per unit of volatility. If you would invest  403.00  in Owlet Inc on September 13, 2024 and sell it today you would earn a total of  119.00  from holding Owlet Inc or generate 29.53% return on investment over 90 days.

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

IRIDEX  vs.  Owlet Inc

IRIDEX

Risk-Adjusted Performance

0 of 100

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 latest unfluctuating performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Owlet Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Owlet Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Owlet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IRIDEX and Owlet

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

The idea behind IRIDEX and Owlet Inc 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.