Correlation Between Bruker and Sight Sciences

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

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

Diversification Opportunities for Bruker and Sight Sciences

0.87

Correlation Coefficient

Bruker  Sight Sciences

Very poor diversification

The 3 months correlation between Bruker and Sight is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bruker and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences and Bruker 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 Bruker 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 Bruker i.e., Bruker and Sight Sciences go up and down completely randomly.

Pair Corralation between Bruker and Sight Sciences

Given the investment horizon of 90 days Bruker is expected to generate 0.67 times more return on investment than Sight Sciences. However, Bruker is 1.5 times less risky than Sight Sciences. It trades about -0.06 of its potential returns per unit of risk. Sight Sciences is currently generating about -0.16 per unit of risk. If you would invest  6,572  in Bruker on September 1, 2024 and sell it today you would lose (777.00) from holding Bruker or give up 11.82% of portfolio value over 90 days.

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

Bruker  vs.  Sight Sciences

Bruker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bruker has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Sight Sciences

Risk-Adjusted Performance

0 of 100

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 December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bruker and Sight Sciences

The main advantage of trading using opposite Bruker and Sight Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bruker 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 Bruker 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.