Correlation Between Innovative Eyewear and Repro Med

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

By analyzing existing cross correlation between Innovative Eyewear and Repro Med Systems, you can compare the effects of market volatilities on Innovative Eyewear and Repro Med 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 Innovative Eyewear with a short position of Repro Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Eyewear and Repro Med.

Diversification Opportunities for Innovative Eyewear and Repro Med

0.63

Correlation Coefficient

Innovative Eyewear  Repro Med

Poor diversification

The 3 months correlation between Innovative and Repro is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Eyewear and Repro Med Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repro Med Systems and Innovative Eyewear 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 Innovative Eyewear are associated (or correlated) with Repro Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repro Med Systems has no effect on the direction of Innovative Eyewear i.e., Innovative Eyewear and Repro Med go up and down completely randomly.

Pair Corralation between Innovative Eyewear and Repro Med

Given the investment horizon of 90 days Innovative Eyewear is expected to under-perform the Repro Med. In addition to that, Innovative Eyewear is 1.33 times more volatile than Repro Med Systems. It trades about -0.15 of its total potential returns per unit of risk. Repro Med Systems is currently generating about -0.15 per unit of volatility. If you would invest  389.00  in Repro Med Systems on December 30, 2024 and sell it today you would lose (130.00) from holding Repro Med Systems or give up 33.42% of portfolio value over 90 days.

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

Innovative Eyewear  vs.  Repro Med Systems

Innovative Eyewear

Risk-Adjusted Performance

Very Weak

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

Repro Med Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Repro Med Systems 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 primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Innovative Eyewear and Repro Med

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

The idea behind Innovative Eyewear and Repro Med Systems 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.