Correlation Between Innovative Eyewear and Stereotaxis

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

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

Diversification Opportunities for Innovative Eyewear and Stereotaxis

-0.2

Correlation Coefficient

Innovative Eyewear  Stereotaxis

Good diversification

The 3 months correlation between Innovative and Stereotaxis is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Eyewear and Stereotaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stereotaxis 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 Stereotaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stereotaxis has no effect on the direction of Innovative Eyewear i.e., Innovative Eyewear and Stereotaxis go up and down completely randomly.

Pair Corralation between Innovative Eyewear and Stereotaxis

Given the investment horizon of 90 days Innovative Eyewear is expected to under-perform the Stereotaxis. In addition to that, Innovative Eyewear is 1.27 times more volatile than Stereotaxis. It trades about -0.12 of its total potential returns per unit of risk. Stereotaxis is currently generating about -0.01 per unit of volatility. If you would invest  239.00  in Stereotaxis on November 29, 2024 and sell it today you would lose (16.00) from holding Stereotaxis or give up 6.69% of portfolio value over 90 days.

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

Innovative Eyewear  vs.  Stereotaxis

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

Stereotaxis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stereotaxis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Stereotaxis is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Innovative Eyewear and Stereotaxis

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

The idea behind Innovative Eyewear and Stereotaxis 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .