Correlation Between Biocept and Sera Prognostics
Can any of the company-specific risk be diversified away by investing in both Biocept 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 Biocept and Sera Prognostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biocept and Sera Prognostics, you can compare the effects of market volatilities on Biocept 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 Biocept with a short position of Sera Prognostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biocept and Sera Prognostics.
Diversification Opportunities for Biocept and Sera Prognostics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Biocept and Sera is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Biocept and Sera Prognostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sera Prognostics and Biocept 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 Biocept 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 Biocept i.e., Biocept and Sera Prognostics go up and down completely randomly.
Pair Corralation between Biocept and Sera Prognostics
Given the investment horizon of 90 days Biocept is expected to under-perform the Sera Prognostics. But the stock apears to be less risky and, when comparing its historical volatility, Biocept is 1.22 times less risky than Sera Prognostics. The stock trades about -0.17 of its potential returns per unit of risk. The Sera Prognostics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Sera Prognostics on August 29, 2024 and sell it today you would earn a total of 536.00 from holding Sera Prognostics or generate 425.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.45% |
| Values | Daily Returns |
Biocept vs. Sera Prognostics
Performance |
| Timeline |
| Biocept |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sera Prognostics |
Biocept and Sera Prognostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biocept and Sera Prognostics
The main advantage of trading using opposite Biocept and Sera Prognostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biocept 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.The idea behind Biocept and Sera Prognostics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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