Correlation Between Castle Biosciences and Enzo Biochem
Can any of the company-specific risk be diversified away by investing in both Castle Biosciences and Enzo Biochem 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 Castle Biosciences and Enzo Biochem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castle Biosciences and Enzo Biochem, you can compare the effects of market volatilities on Castle Biosciences and Enzo Biochem 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 Castle Biosciences with a short position of Enzo Biochem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castle Biosciences and Enzo Biochem.
Diversification Opportunities for Castle Biosciences and Enzo Biochem
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Castle and Enzo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Castle Biosciences and Enzo Biochem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzo Biochem and Castle Biosciences 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 Castle Biosciences are associated (or correlated) with Enzo Biochem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzo Biochem has no effect on the direction of Castle Biosciences i.e., Castle Biosciences and Enzo Biochem go up and down completely randomly.
Pair Corralation between Castle Biosciences and Enzo Biochem
Given the investment horizon of 90 days Castle Biosciences is expected to generate 1.0 times more return on investment than Enzo Biochem. However, Castle Biosciences is 1.0 times less risky than Enzo Biochem. It trades about 0.03 of its potential returns per unit of risk. Enzo Biochem is currently generating about 0.0 per unit of risk. If you would invest 2,441 in Castle Biosciences on August 24, 2024 and sell it today you would earn a total of 540.00 from holding Castle Biosciences or generate 22.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Castle Biosciences vs. Enzo Biochem
Performance |
| Timeline |
| Castle Biosciences |
| Enzo Biochem |
Castle Biosciences and Enzo Biochem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castle Biosciences and Enzo Biochem
The main advantage of trading using opposite Castle Biosciences and Enzo Biochem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castle Biosciences position performs unexpectedly, Enzo Biochem 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 Enzo Biochem will offset losses from the drop in Enzo Biochem's long position.| Castle Biosciences vs. Caredx Inc | Castle Biosciences vs. Twist Bioscience Corp | Castle Biosciences vs. Biodesix | Castle Biosciences vs. Natera Inc |
| Enzo Biochem vs. Fonar | Enzo Biochem vs. Burning Rock Biotech | Enzo Biochem vs. Sera Prognostics | Enzo Biochem vs. Psychemedics |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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