Correlation Between IRIDEX and Outset Medical
Can any of the company-specific risk be diversified away by investing in both IRIDEX and Outset Medical 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 IRIDEX and Outset Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IRIDEX and Outset Medical, you can compare the effects of market volatilities on IRIDEX and Outset Medical 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 IRIDEX with a short position of Outset Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRIDEX and Outset Medical.
Diversification Opportunities for IRIDEX and Outset Medical
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IRIDEX and Outset is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding IRIDEX and Outset Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outset Medical and IRIDEX 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 IRIDEX are associated (or correlated) with Outset Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outset Medical has no effect on the direction of IRIDEX i.e., IRIDEX and Outset Medical go up and down completely randomly.
Pair Corralation between IRIDEX and Outset Medical
Given the investment horizon of 90 days IRIDEX is expected to generate 0.23 times more return on investment than Outset Medical. However, IRIDEX is 4.27 times less risky than Outset Medical. It trades about -0.07 of its potential returns per unit of risk. Outset Medical is currently generating about -0.1 per unit of risk. If you would invest 195.00 in IRIDEX on June 23, 2024 and sell it today you would lose (6.00) from holding IRIDEX or give up 3.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
IRIDEX vs. Outset Medical
Performance |
Timeline |
IRIDEX |
Outset Medical |
IRIDEX and Outset Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IRIDEX and Outset Medical
The main advantage of trading using opposite IRIDEX and Outset Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRIDEX position performs unexpectedly, Outset Medical 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 Outset Medical will offset losses from the drop in Outset Medical's long position.IRIDEX vs. InfuSystems Holdings | IRIDEX vs. Pro Dex | IRIDEX vs. LeMaitre Vascular | IRIDEX vs. Utah Medical Products |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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