Correlation Between Figs and Precipio
Can any of the company-specific risk be diversified away by investing in both Figs and Precipio 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 Figs and Precipio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and Precipio, you can compare the effects of market volatilities on Figs and Precipio 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 Figs with a short position of Precipio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Precipio.
Diversification Opportunities for Figs and Precipio
Poor diversification
The 3 months correlation between Figs and Precipio is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Precipio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precipio and Figs 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 Figs Inc are associated (or correlated) with Precipio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precipio has no effect on the direction of Figs i.e., Figs and Precipio go up and down completely randomly.
Pair Corralation between Figs and Precipio
Given the investment horizon of 90 days Figs Inc is expected to under-perform the Precipio. But the stock apears to be less risky and, when comparing its historical volatility, Figs Inc is 1.04 times less risky than Precipio. The stock trades about -0.01 of its potential returns per unit of risk. The Precipio is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Precipio on August 31, 2024 and sell it today you would lose (366.00) from holding Precipio or give up 38.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. Precipio
Performance |
| Timeline |
| Figs Inc |
| Precipio |
Figs and Precipio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and Precipio
The main advantage of trading using opposite Figs and Precipio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs position performs unexpectedly, Precipio 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 Precipio will offset losses from the drop in Precipio's long position.The idea behind Figs Inc and Precipio 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.| Precipio vs. Biodesix | Precipio vs. Sera Prognostics | Precipio vs. Applied DNA Sciences | Precipio vs. Caredx 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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