Correlation Between Axogen and Sight Sciences

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

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

Diversification Opportunities for Axogen and Sight Sciences

-0.69

Correlation Coefficient

Axogen  Sight Sciences

Excellent diversification

The 3 months correlation between Axogen and Sight is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Axogen Inc and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences and Axogen 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 Axogen Inc 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 Axogen i.e., Axogen and Sight Sciences go up and down completely randomly.

Pair Corralation between Axogen and Sight Sciences

Given the investment horizon of 90 days Axogen Inc is expected to under-perform the Sight Sciences. But the stock apears to be less risky and, when comparing its historical volatility, Axogen Inc is 1.25 times less risky than Sight Sciences. The stock trades about -0.18 of its potential returns per unit of risk. The Sight Sciences is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  434.00  in Sight Sciences on March 4, 2024 and sell it today you would earn a total of  222.00  from holding Sight Sciences or generate 51.15% return on investment over 90 days.

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

Axogen Inc  vs.  Sight Sciences

Axogen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sight Sciences

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sight Sciences are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical indicators, Sight Sciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axogen and Sight Sciences

The main advantage of trading using opposite Axogen and Sight Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axogen 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 Axogen Inc 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.