Correlation Between Sight Sciences and Tela Bio

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

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

Diversification Opportunities for Sight Sciences and Tela Bio

-0.44

Correlation Coefficient

Sight Sciences  Tela Bio

Very good diversification

The 3 months correlation between Sight and Tela is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sight Sciences and Tela Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tela Bio 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 Tela Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tela Bio has no effect on the direction of Sight Sciences i.e., Sight Sciences and Tela Bio go up and down completely randomly.

Pair Corralation between Sight Sciences and Tela Bio

Given the investment horizon of 90 days Sight Sciences is expected to under-perform the Tela Bio. In addition to that, Sight Sciences is 1.29 times more volatile than Tela Bio. It trades about -0.28 of its total potential returns per unit of risk. Tela Bio is currently generating about -0.08 per unit of volatility. If you would invest  280.00  in Tela Bio on October 20, 2024 and sell it today you would lose (11.00) from holding Tela Bio or give up 3.93% of portfolio value over 90 days.

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

Sight Sciences  vs.  Tela Bio

Sight Sciences

Risk-Adjusted Performance

0 of 100

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Tela Bio

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tela Bio are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Tela Bio may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sight Sciences and Tela Bio

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

The idea behind Sight Sciences and Tela Bio 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.