Correlation Between STRATA Skin and Sientra

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

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

Diversification Opportunities for STRATA Skin and Sientra

0.0

Correlation Coefficient

STRATA Skin  Sientra

Pay attention - limited upside

The 3 months correlation between STRATA and Sientra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STRATA Skin Sciences and Sientra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sientra and STRATA Skin 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 STRATA Skin Sciences are associated (or correlated) with Sientra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sientra has no effect on the direction of STRATA Skin i.e., STRATA Skin and Sientra go up and down completely randomly.

Pair Corralation between STRATA Skin and Sientra

If you would invest (100.00) in Sientra on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Sientra or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

STRATA Skin Sciences  vs.  Sientra

STRATA Skin Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days STRATA Skin Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, STRATA Skin is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Sientra

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sientra has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Sientra is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with STRATA Skin and Sientra

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

The idea behind STRATA Skin Sciences and Sientra 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .