Correlation Between Sight Sciences and CochLear | SGHT vs. CHEOY

Correlation Between Sight Sciences and CochLear

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Can any of the company-specific risk be diversified away by investing in both Sight Sciences and CochLear 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 Sight Sciences and CochLear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sight Sciences and CochLear Ltd ADR, you can compare the effects of market volatilities on Sight Sciences and CochLear 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 Sight Sciences with a short position of CochLear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sight Sciences and CochLear.

Diversification Opportunities for Sight Sciences and CochLear

SightCochLearDiversified AwaySightCochLearDiversified Away100%
0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between Sight and CochLear is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sight Sciences and CochLear Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CochLear ADR and Sight Sciences 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 Sight Sciences are associated (or correlated) with CochLear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CochLear ADR has no effect on the direction of Sight Sciences i.e., Sight Sciences and CochLear go up and down completely randomly.

Pair Corralation between Sight Sciences and CochLear

Given the investment horizon of 90 days Sight Sciences is expected to under-perform the CochLear. In addition to that, Sight Sciences is 3.53 times more volatile than CochLear Ltd ADR. It trades about -0.12 of its total potential returns per unit of risk. CochLear Ltd ADR is currently generating about 0.15 per unit of volatility. If you would invest  9,478  in CochLear Ltd ADR on September 4, 2024 and sell it today you would earn a total of  392.00  from holding CochLear Ltd ADR or generate 4.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sight Sciences  vs.  CochLear Ltd ADR

 Performance 
JavaScript chart by amCharts 3.21.15SepOctNov -40-30-20-100
JavaScript chart by amCharts 3.21.15SGHT CHEOY
       Timeline  
Sight Sciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
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Very Weak
Over the last 90 days Sight Sciences 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 technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec44.555.566.57
CochLear ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CochLear Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, CochLear is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec92949698100102104

Sight Sciences and CochLear Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.93-5.19-3.45-1.71-0.011.432.894.355.81 0.050.100.15
JavaScript chart by amCharts 3.21.15SGHT CHEOY
       Returns  

Pair Trading with Sight Sciences and CochLear

The main advantage of trading using opposite Sight Sciences and CochLear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sight Sciences position performs unexpectedly, CochLear 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 CochLear will offset losses from the drop in CochLear's long position.
The idea behind Sight Sciences and CochLear Ltd ADR 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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