Correlation Between HealthStream and 10X Genomics
Can any of the company-specific risk be diversified away by investing in both HealthStream and 10X Genomics 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 HealthStream and 10X Genomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HealthStream and 10X Genomics, you can compare the effects of market volatilities on HealthStream and 10X Genomics 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 HealthStream with a short position of 10X Genomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HealthStream and 10X Genomics.
Diversification Opportunities for HealthStream and 10X Genomics
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HealthStream and 10X is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding HealthStream and 10X Genomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 10X Genomics and HealthStream 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 HealthStream are associated (or correlated) with 10X Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 10X Genomics has no effect on the direction of HealthStream i.e., HealthStream and 10X Genomics go up and down completely randomly.
Pair Corralation between HealthStream and 10X Genomics
Given the investment horizon of 90 days HealthStream is expected to generate 0.5 times more return on investment than 10X Genomics. However, HealthStream is 2.01 times less risky than 10X Genomics. It trades about 0.16 of its potential returns per unit of risk. 10X Genomics is currently generating about -0.07 per unit of risk. If you would invest 2,842 in HealthStream on September 20, 2024 and sell it today you would earn a total of 355.00 from holding HealthStream or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HealthStream vs. 10X Genomics
Performance |
| Timeline |
| HealthStream |
| 10X Genomics |
HealthStream and 10X Genomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HealthStream and 10X Genomics
The main advantage of trading using opposite HealthStream and 10X Genomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HealthStream position performs unexpectedly, 10X Genomics 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 10X Genomics will offset losses from the drop in 10X Genomics' long position.The idea behind HealthStream and 10X Genomics 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.| 10X Genomics vs. Twist Bioscience Corp | 10X Genomics vs. Fate Therapeutics | 10X Genomics vs. Beam Therapeutics | 10X Genomics vs. Veracyte |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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