Correlation Between Caredx and Applied DNA
Can any of the company-specific risk be diversified away by investing in both Caredx and Applied DNA 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 Caredx and Applied DNA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caredx Inc and Applied DNA Sciences, you can compare the effects of market volatilities on Caredx and Applied DNA 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 Caredx with a short position of Applied DNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caredx and Applied DNA.
Diversification Opportunities for Caredx and Applied DNA
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caredx and Applied is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Caredx Inc and Applied DNA Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied DNA Sciences and Caredx 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 Caredx Inc are associated (or correlated) with Applied DNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied DNA Sciences has no effect on the direction of Caredx i.e., Caredx and Applied DNA go up and down completely randomly.
Pair Corralation between Caredx and Applied DNA
Given the investment horizon of 90 days Caredx Inc is expected to generate 0.43 times more return on investment than Applied DNA. However, Caredx Inc is 2.31 times less risky than Applied DNA. It trades about 0.08 of its potential returns per unit of risk. Applied DNA Sciences is currently generating about -0.06 per unit of risk. If you would invest 806.00 in Caredx Inc on August 31, 2024 and sell it today you would earn a total of 1,648 from holding Caredx Inc or generate 204.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caredx Inc vs. Applied DNA Sciences
Performance |
| Timeline |
| Caredx Inc |
| Applied DNA Sciences |
Caredx and Applied DNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caredx and Applied DNA
The main advantage of trading using opposite Caredx and Applied DNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caredx position performs unexpectedly, Applied DNA 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 Applied DNA will offset losses from the drop in Applied DNA's long position.| Caredx vs. Castle Biosciences | Caredx vs. Twist Bioscience Corp | Caredx vs. Biodesix | Caredx vs. Natera Inc |
| Applied DNA vs. Biodesix | Applied DNA vs. DarioHealth Corp | Applied DNA vs. Exagen Inc | Applied DNA vs. Burning Rock Biotech |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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