Correlation Between Sight Sciences and EDAP TMS

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

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

Diversification Opportunities for Sight Sciences and EDAP TMS

0.81

Correlation Coefficient

Sight Sciences  EDAP TMS

Very poor diversification

The 3 months correlation between Sight and EDAP is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sight Sciences and EDAP TMS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDAP TMS SA and Sight Sciences 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 Sight Sciences are associated (or correlated) with EDAP TMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDAP TMS SA has no effect on the direction of Sight Sciences i.e., Sight Sciences and EDAP TMS go up and down completely randomly.

Pair Corralation between Sight Sciences and EDAP TMS

Given the investment horizon of 90 days Sight Sciences is expected to under-perform the EDAP TMS. In addition to that, Sight Sciences is 1.19 times more volatile than EDAP TMS SA. It trades about -0.22 of its total potential returns per unit of risk. EDAP TMS SA is currently generating about -0.16 per unit of volatility. If you would invest  324.00  in EDAP TMS SA on September 16, 2024 and sell it today you would lose (104.00) from holding EDAP TMS SA or give up 32.1% of portfolio value over 90 days.

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

Sight Sciences  vs.  EDAP TMS SA

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 conflicting performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

EDAP TMS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EDAP TMS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Sight Sciences and EDAP TMS

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

The idea behind Sight Sciences and EDAP TMS SA 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.