Correlation Between Applied DNA and Personalis
Can any of the company-specific risk be diversified away by investing in both Applied DNA and Personalis 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 Personalis 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 Personalis, you can compare the effects of market volatilities on Applied DNA and Personalis 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 Personalis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied DNA and Personalis.
Diversification Opportunities for Applied DNA and Personalis
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and Personalis is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Applied DNA Sciences and Personalis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Personalis 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 Personalis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Personalis has no effect on the direction of Applied DNA i.e., Applied DNA and Personalis go up and down completely randomly.
Pair Corralation between Applied DNA and Personalis
Given the investment horizon of 90 days Applied DNA Sciences is expected to under-perform the Personalis. In addition to that, Applied DNA is 1.44 times more volatile than Personalis. It trades about -0.05 of its total potential returns per unit of risk. Personalis is currently generating about 0.04 per unit of volatility. If you would invest 270.00 in Personalis on September 4, 2024 and sell it today you would earn a total of 120.00 from holding Personalis or generate 44.44% 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. Personalis
Performance |
| Timeline |
| Applied DNA Sciences |
| Personalis |
Applied DNA and Personalis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied DNA and Personalis
The main advantage of trading using opposite Applied DNA and Personalis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied DNA position performs unexpectedly, Personalis 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 Personalis will offset losses from the drop in Personalis' long position.| Applied DNA vs. Biodesix | Applied DNA vs. DarioHealth Corp | Applied DNA vs. Exagen Inc | Applied DNA vs. Burning Rock Biotech |
| Personalis vs. Twist Bioscience Corp | Personalis vs. Natera Inc | Personalis vs. Guardant Health | Personalis vs. Castle Biosciences |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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