Correlation Between Eyenovia and Tscan Therapeutics

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

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

Diversification Opportunities for Eyenovia and Tscan Therapeutics

0.73

Correlation Coefficient

Eyenovia  Tscan Therapeutics

Poor diversification

The 3 months correlation between Eyenovia and Tscan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eyenovia and Tscan Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tscan Therapeutics and Eyenovia 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 Eyenovia are associated (or correlated) with Tscan Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tscan Therapeutics has no effect on the direction of Eyenovia i.e., Eyenovia and Tscan Therapeutics go up and down completely randomly.

Pair Corralation between Eyenovia and Tscan Therapeutics

Given the investment horizon of 90 days Eyenovia is expected to under-perform the Tscan Therapeutics. In addition to that, Eyenovia is 2.62 times more volatile than Tscan Therapeutics. It trades about -0.08 of its total potential returns per unit of risk. Tscan Therapeutics is currently generating about -0.09 per unit of volatility. If you would invest  842.00  in Tscan Therapeutics on September 2, 2024 and sell it today you would lose (365.00) from holding Tscan Therapeutics or give up 43.35% of portfolio value over 90 days.

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

Eyenovia  vs.  Tscan Therapeutics

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 inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Tscan Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tscan Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Eyenovia and Tscan Therapeutics

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

The idea behind Eyenovia and Tscan Therapeutics 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.