Correlation Between HTG Molecular and Castle Biosciences
Can any of the company-specific risk be diversified away by investing in both HTG Molecular and Castle Biosciences 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 HTG Molecular and Castle Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HTG Molecular Diagnostics and Castle Biosciences, you can compare the effects of market volatilities on HTG Molecular and Castle Biosciences 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 HTG Molecular with a short position of Castle Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of HTG Molecular and Castle Biosciences.
Diversification Opportunities for HTG Molecular and Castle Biosciences
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HTG and Castle is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding HTG Molecular Diagnostics and Castle Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castle Biosciences and HTG Molecular 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 HTG Molecular Diagnostics are associated (or correlated) with Castle Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castle Biosciences has no effect on the direction of HTG Molecular i.e., HTG Molecular and Castle Biosciences go up and down completely randomly.
Pair Corralation between HTG Molecular and Castle Biosciences
Given the investment horizon of 90 days HTG Molecular Diagnostics is expected to under-perform the Castle Biosciences. In addition to that, HTG Molecular is 3.47 times more volatile than Castle Biosciences. It trades about 0.0 of its total potential returns per unit of risk. Castle Biosciences is currently generating about 0.06 per unit of volatility. If you would invest 1,433 in Castle Biosciences on August 31, 2024 and sell it today you would earn a total of 1,595 from holding Castle Biosciences or generate 111.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
HTG Molecular Diagnostics vs. Castle Biosciences
Performance |
| Timeline |
| HTG Molecular Diagnostics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Castle Biosciences |
HTG Molecular and Castle Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HTG Molecular and Castle Biosciences
The main advantage of trading using opposite HTG Molecular and Castle Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HTG Molecular position performs unexpectedly, Castle Biosciences 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 Castle Biosciences will offset losses from the drop in Castle Biosciences' long position.| HTG Molecular vs. bioAffinity Technologies, | HTG Molecular vs. Psychemedics | HTG Molecular vs. Precipio | HTG Molecular vs. Intelligent Bio Solutions |
| Castle Biosciences vs. Caredx Inc | Castle Biosciences vs. Twist Bioscience Corp | Castle Biosciences vs. Biodesix | Castle Biosciences vs. Natera 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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