Correlation Between Applied DNA and Biodesix
Can any of the company-specific risk be diversified away by investing in both Applied DNA and Biodesix 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 Applied DNA and Biodesix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied DNA Sciences and Biodesix, you can compare the effects of market volatilities on Applied DNA and Biodesix 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 Applied DNA with a short position of Biodesix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied DNA and Biodesix.
Diversification Opportunities for Applied DNA and Biodesix
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Applied and Biodesix is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Applied DNA Sciences and Biodesix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodesix and Applied DNA 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 Applied DNA Sciences are associated (or correlated) with Biodesix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodesix has no effect on the direction of Applied DNA i.e., Applied DNA and Biodesix go up and down completely randomly.
Pair Corralation between Applied DNA and Biodesix
Given the investment horizon of 90 days Applied DNA Sciences is expected to generate 4.06 times more return on investment than Biodesix. However, Applied DNA is 4.06 times more volatile than Biodesix. It trades about 0.04 of its potential returns per unit of risk. Biodesix is currently generating about -0.05 per unit of risk. If you would invest 38.00 in Applied DNA Sciences on November 3, 2024 and sell it today you would lose (20.00) from holding Applied DNA Sciences or give up 52.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied DNA Sciences vs. Biodesix
Performance |
| Timeline |
| Applied DNA Sciences |
| Biodesix |
Applied DNA and Biodesix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied DNA and Biodesix
The main advantage of trading using opposite Applied DNA and Biodesix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied DNA position performs unexpectedly, Biodesix 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 Biodesix will offset losses from the drop in Biodesix's long position.| Applied DNA vs. Biodesix | Applied DNA vs. DarioHealth Corp | Applied DNA vs. Exagen Inc | Applied DNA vs. Burning Rock Biotech |
| Biodesix vs. Aclaris Therapeutics | Biodesix vs. Castle Biosciences | Biodesix vs. Prenetics Global | Biodesix vs. DarioHealth Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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