Correlation Between Beyond Air and Sight Sciences

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

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

Diversification Opportunities for Beyond Air and Sight Sciences

0.75

Correlation Coefficient

Beyond Air  Sight Sciences

Poor diversification

The 3 months correlation between Beyond and Sight is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences and Beyond Air 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 Beyond Air are associated (or correlated) with Sight Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sight Sciences has no effect on the direction of Beyond Air i.e., Beyond Air and Sight Sciences go up and down completely randomly.

Pair Corralation between Beyond Air and Sight Sciences

Given the investment horizon of 90 days Beyond Air is expected to under-perform the Sight Sciences. In addition to that, Beyond Air is 1.68 times more volatile than Sight Sciences. It trades about -0.15 of its total potential returns per unit of risk. Sight Sciences is currently generating about -0.24 per unit of volatility. If you would invest  391.00  in Sight Sciences on November 27, 2024 and sell it today you would lose (159.00) from holding Sight Sciences or give up 40.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Beyond Air  vs.  Sight Sciences

Beyond Air

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beyond Air has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sight Sciences

Risk-Adjusted Performance

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

Pair Trading with Beyond Air and Sight Sciences

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

The idea behind Beyond Air and Sight Sciences 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.