Correlation Between Applied DNA and Sera Prognostics
Can any of the company-specific risk be diversified away by investing in both Applied DNA and Sera Prognostics 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 Sera Prognostics 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 Sera Prognostics, you can compare the effects of market volatilities on Applied DNA and Sera Prognostics 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 Sera Prognostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied DNA and Sera Prognostics.
Diversification Opportunities for Applied DNA and Sera Prognostics
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Applied and Sera is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Applied DNA Sciences and Sera Prognostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sera Prognostics 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 Sera Prognostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sera Prognostics has no effect on the direction of Applied DNA i.e., Applied DNA and Sera Prognostics go up and down completely randomly.
Pair Corralation between Applied DNA and Sera Prognostics
Given the investment horizon of 90 days Applied DNA Sciences is expected to under-perform the Sera Prognostics. In addition to that, Applied DNA is 1.4 times more volatile than Sera Prognostics. It trades about -0.24 of its total potential returns per unit of risk. Sera Prognostics is currently generating about -0.03 per unit of volatility. If you would invest 700.00 in Sera Prognostics on August 28, 2024 and sell it today you would lose (62.00) from holding Sera Prognostics or give up 8.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied DNA Sciences vs. Sera Prognostics
Performance |
| Timeline |
| Applied DNA Sciences |
| Sera Prognostics |
Applied DNA and Sera Prognostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied DNA and Sera Prognostics
The main advantage of trading using opposite Applied DNA and Sera Prognostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied DNA position performs unexpectedly, Sera Prognostics 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 Sera Prognostics will offset losses from the drop in Sera Prognostics' long position.| Applied DNA vs. Biodesix | Applied DNA vs. DarioHealth Corp | Applied DNA vs. Exagen Inc | Applied DNA vs. Burning Rock Biotech |
| Sera Prognostics vs. Fonar | Sera Prognostics vs. Burning Rock Biotech | Sera Prognostics vs. Exagen Inc | Sera Prognostics vs. Sotera Health Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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