Correlation Between Sharps Technology and Warby Parker

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

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

Diversification Opportunities for Sharps Technology and Warby Parker

-0.63

Correlation Coefficient

Sharps Technology  Warby Parker

Excellent diversification

The 3 months correlation between Sharps and Warby is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology Warrant and Warby Parker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warby Parker and Sharps Technology 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 Sharps Technology Warrant are associated (or correlated) with Warby Parker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warby Parker has no effect on the direction of Sharps Technology i.e., Sharps Technology and Warby Parker go up and down completely randomly.

Pair Corralation between Sharps Technology and Warby Parker

Assuming the 90 days horizon Sharps Technology Warrant is expected to generate 6.37 times more return on investment than Warby Parker. However, Sharps Technology is 6.37 times more volatile than Warby Parker. It trades about 0.07 of its potential returns per unit of risk. Warby Parker is currently generating about 0.31 per unit of risk. If you would invest  7.07  in Sharps Technology Warrant on October 8, 2024 and sell it today you would lose (0.47) from holding Sharps Technology Warrant or give up 6.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	87.3%
Values	Daily Returns

Sharps Technology Warrant  vs.  Warby Parker

Sharps Technology Warrant

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sharps Technology Warrant are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Sharps Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Warby Parker

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Warby Parker are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, Warby Parker showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharps Technology and Warby Parker

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

The idea behind Sharps Technology Warrant and Warby Parker 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.