Correlation Between Illumina and Fulgent Genetics
Can any of the company-specific risk be diversified away by investing in both Illumina and Fulgent Genetics 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 Illumina and Fulgent Genetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Illumina and Fulgent Genetics, you can compare the effects of market volatilities on Illumina and Fulgent Genetics 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 Illumina with a short position of Fulgent Genetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Illumina and Fulgent Genetics.
Diversification Opportunities for Illumina and Fulgent Genetics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Illumina and Fulgent is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Illumina and Fulgent Genetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Genetics and Illumina 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 Illumina are associated (or correlated) with Fulgent Genetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Genetics has no effect on the direction of Illumina i.e., Illumina and Fulgent Genetics go up and down completely randomly.
Pair Corralation between Illumina and Fulgent Genetics
Given the investment horizon of 90 days Illumina is expected to generate 1.04 times more return on investment than Fulgent Genetics. However, Illumina is 1.04 times more volatile than Fulgent Genetics. It trades about -0.01 of its potential returns per unit of risk. Fulgent Genetics is currently generating about -0.03 per unit of risk. If you would invest 19,637 in Illumina on August 28, 2024 and sell it today you would lose (5,255) from holding Illumina or give up 26.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Illumina vs. Fulgent Genetics
Performance |
| Timeline |
| Illumina |
| Fulgent Genetics |
Illumina and Fulgent Genetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Illumina and Fulgent Genetics
The main advantage of trading using opposite Illumina and Fulgent Genetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Illumina position performs unexpectedly, Fulgent Genetics 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 Fulgent Genetics will offset losses from the drop in Fulgent Genetics' long position.| Illumina vs. Fonar | Illumina vs. Burning Rock Biotech | Illumina vs. Sera Prognostics | Illumina vs. Exagen Inc |
| Fulgent Genetics vs. Illumina | Fulgent Genetics vs. T2 Biosystms | Fulgent Genetics vs. Agilent Technologies | Fulgent Genetics vs. Mettler Toledo International |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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