Correlation Between Iradimed and Glaukos Corp

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

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

Diversification Opportunities for Iradimed and Glaukos Corp

-0.23

Correlation Coefficient

Iradimed  Glaukos Corp

Very good diversification

The 3 months correlation between Iradimed and Glaukos is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Iradimed Co and Glaukos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaukos Corp and Iradimed 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 Iradimed Co are associated (or correlated) with Glaukos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaukos Corp has no effect on the direction of Iradimed i.e., Iradimed and Glaukos Corp go up and down completely randomly.

Pair Corralation between Iradimed and Glaukos Corp

Given the investment horizon of 90 days Iradimed Co is expected to under-perform the Glaukos Corp. But the stock apears to be less risky and, when comparing its historical volatility, Iradimed Co is 1.09 times less risky than Glaukos Corp. The stock trades about -0.05 of its potential returns per unit of risk. The Glaukos Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  9,213  in Glaukos Corp on February 18, 2024 and sell it today you would earn a total of  1,766  from holding Glaukos Corp or generate 19.17% return on investment over 90 days.

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

Iradimed Co  vs.  Glaukos Corp

Iradimed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iradimed Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Iradimed is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Glaukos Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Glaukos Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Glaukos Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iradimed and Glaukos Corp

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

The idea behind Iradimed Co and Glaukos 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.