Correlation Between Quidel and Glaukos Corp

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

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

Diversification Opportunities for Quidel and Glaukos Corp

-0.59

Correlation Coefficient

Quidel  Glaukos Corp

Excellent diversification

The 3 months correlation between Quidel and Glaukos is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Quidel and Glaukos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaukos Corp and Quidel 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 Quidel are associated (or correlated) with Glaukos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaukos Corp has no effect on the direction of Quidel i.e., Quidel and Glaukos Corp go up and down completely randomly.

Pair Corralation between Quidel and Glaukos Corp

Given the investment horizon of 90 days Quidel is expected to under-perform the Glaukos Corp. In addition to that, Quidel is 1.28 times more volatile than Glaukos Corp. It trades about -0.01 of its total potential returns per unit of risk. Glaukos Corp is currently generating about 0.12 per unit of volatility. If you would invest  12,158  in Glaukos Corp on September 17, 2024 and sell it today you would earn a total of  2,249  from holding Glaukos Corp or generate 18.5% return on investment over 90 days.

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

Quidel  vs.  Glaukos Corp

Quidel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quidel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Quidel is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Glaukos Corp

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Quidel and Glaukos Corp

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

The idea behind Quidel and Glaukos 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.