Correlation Between Applied DNA and Danaher
Can any of the company-specific risk be diversified away by investing in both Applied DNA and Danaher 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 Danaher 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 Danaher, you can compare the effects of market volatilities on Applied DNA and Danaher 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 Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied DNA and Danaher.
Diversification Opportunities for Applied DNA and Danaher
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and Danaher is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Applied DNA Sciences and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher 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 Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of Applied DNA i.e., Applied DNA and Danaher go up and down completely randomly.
Pair Corralation between Applied DNA and Danaher
Given the investment horizon of 90 days Applied DNA Sciences is expected to under-perform the Danaher. In addition to that, Applied DNA is 7.22 times more volatile than Danaher. It trades about -0.05 of its total potential returns per unit of risk. Danaher is currently generating about 0.01 per unit of volatility. If you would invest 24,103 in Danaher on September 4, 2024 and sell it today you would earn a total of 26.00 from holding Danaher or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied DNA Sciences vs. Danaher
Performance |
| Timeline |
| Applied DNA Sciences |
| Danaher |
Applied DNA and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied DNA and Danaher
The main advantage of trading using opposite Applied DNA and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied DNA position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| Applied DNA vs. Biodesix | Applied DNA vs. DarioHealth Corp | Applied DNA vs. Exagen Inc | Applied DNA vs. Burning Rock Biotech |
| Danaher vs. Agilent Technologies | Danaher vs. Illumina | Danaher vs. IDEXX Laboratories | Danaher vs. Waters |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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