Correlation Between Rxsight and Rapid Micro

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

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

Diversification Opportunities for Rxsight and Rapid Micro

-0.5

Correlation Coefficient

Rxsight  Rapid Micro

Very good diversification

The 3 months correlation between Rxsight and Rapid is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Rxsight and Rapid Micro Biosystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapid Micro Biosystems and Rxsight 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 Rxsight are associated (or correlated) with Rapid Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapid Micro Biosystems has no effect on the direction of Rxsight i.e., Rxsight and Rapid Micro go up and down completely randomly.

Pair Corralation between Rxsight and Rapid Micro

Given the investment horizon of 90 days Rxsight is expected to under-perform the Rapid Micro. But the stock apears to be less risky and, when comparing its historical volatility, Rxsight is 3.38 times less risky than Rapid Micro. The stock trades about -0.13 of its potential returns per unit of risk. The Rapid Micro Biosystems is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Rapid Micro Biosystems on December 29, 2024 and sell it today you would earn a total of  179.00  from holding Rapid Micro Biosystems or generate 198.89% return on investment over 90 days.

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

Rxsight  vs.  Rapid Micro Biosystems

Rxsight

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rxsight 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Rapid Micro Biosystems

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rapid Micro Biosystems are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Rapid Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rxsight and Rapid Micro

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

The idea behind Rxsight and Rapid Micro Biosystems 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.