Correlation Between Exagen and Eyenovia

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

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

Diversification Opportunities for Exagen and Eyenovia

-0.84

Correlation Coefficient

Exagen  Eyenovia

Pay attention - limited upside

The 3 months correlation between Exagen and Eyenovia is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and Eyenovia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eyenovia and Exagen 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 Exagen Inc are associated (or correlated) with Eyenovia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eyenovia has no effect on the direction of Exagen i.e., Exagen and Eyenovia go up and down completely randomly.

Pair Corralation between Exagen and Eyenovia

Considering the 90-day investment horizon Exagen Inc is expected to generate 0.58 times more return on investment than Eyenovia. However, Exagen Inc is 1.73 times less risky than Eyenovia. It trades about 0.07 of its potential returns per unit of risk. Eyenovia is currently generating about -0.06 per unit of risk. If you would invest  200.00  in Exagen Inc on October 6, 2024 and sell it today you would earn a total of  158.00  from holding Exagen Inc or generate 79.0% return on investment over 90 days.

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

Exagen Inc  vs.  Eyenovia

Exagen Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

Eyenovia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eyenovia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Exagen and Eyenovia

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

The idea behind Exagen Inc and Eyenovia 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.