Correlation Between Avinger and Predictive Oncology
Can any of the company-specific risk be diversified away by investing in both Avinger and Predictive Oncology 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 Avinger and Predictive Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avinger and Predictive Oncology, you can compare the effects of market volatilities on Avinger and Predictive Oncology 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 Avinger with a short position of Predictive Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avinger and Predictive Oncology.
Diversification Opportunities for Avinger and Predictive Oncology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avinger and Predictive is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Avinger and Predictive Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predictive Oncology and Avinger 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 Avinger are associated (or correlated) with Predictive Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predictive Oncology has no effect on the direction of Avinger i.e., Avinger and Predictive Oncology go up and down completely randomly.
Pair Corralation between Avinger and Predictive Oncology
Given the investment horizon of 90 days Avinger is expected to under-perform the Predictive Oncology. But the stock apears to be less risky and, when comparing its historical volatility, Avinger is 1.53 times less risky than Predictive Oncology. The stock trades about -0.09 of its potential returns per unit of risk. The Predictive Oncology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 145.00 in Predictive Oncology on September 1, 2024 and sell it today you would lose (64.00) from holding Predictive Oncology or give up 44.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avinger vs. Predictive Oncology
Performance |
| Timeline |
| Avinger |
| Predictive Oncology |
Avinger and Predictive Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avinger and Predictive Oncology
The main advantage of trading using opposite Avinger and Predictive Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avinger position performs unexpectedly, Predictive Oncology 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 Predictive Oncology will offset losses from the drop in Predictive Oncology's long position.| Avinger vs. GlucoTrack | Avinger vs. Nexgel Inc | Avinger vs. Sharps Technology | Avinger vs. Innovative Eyewear |
| Predictive Oncology vs. GlucoTrack | Predictive Oncology vs. Sharps Technology | Predictive Oncology vs. Microbot Medical | Predictive Oncology vs. Nexgel Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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