Correlation Between Rxsight and Pulmonx Corp

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

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

Diversification Opportunities for Rxsight and Pulmonx Corp

0.46

Correlation Coefficient

Rxsight  Pulmonx Corp

Very weak diversification

The 3 months correlation between Rxsight and Pulmonx is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Rxsight and Pulmonx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmonx Corp and Rxsight 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 Rxsight are associated (or correlated) with Pulmonx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmonx Corp has no effect on the direction of Rxsight i.e., Rxsight and Pulmonx Corp go up and down completely randomly.

Pair Corralation between Rxsight and Pulmonx Corp

Given the investment horizon of 90 days Rxsight is expected to under-perform the Pulmonx Corp. But the stock apears to be less risky and, when comparing its historical volatility, Rxsight is 1.91 times less risky than Pulmonx Corp. The stock trades about -0.08 of its potential returns per unit of risk. The Pulmonx Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  650.00  in Pulmonx Corp on September 2, 2024 and sell it today you would lose (5.00) from holding Pulmonx Corp or give up 0.77% of portfolio value over 90 days.

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

Rxsight  vs.  Pulmonx Corp

Rxsight

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rxsight has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pulmonx Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pulmonx Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Pulmonx Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Rxsight and Pulmonx Corp

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

The idea behind Rxsight and Pulmonx Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.