Correlation Between Laboratory and OraSure Technologies
Can any of the company-specific risk be diversified away by investing in both Laboratory and OraSure Technologies 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 Laboratory and OraSure Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laboratory of and OraSure Technologies, you can compare the effects of market volatilities on Laboratory and OraSure Technologies 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 Laboratory with a short position of OraSure Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laboratory and OraSure Technologies.
Diversification Opportunities for Laboratory and OraSure Technologies
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Laboratory and OraSure is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and OraSure Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OraSure Technologies and Laboratory 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 Laboratory of are associated (or correlated) with OraSure Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OraSure Technologies has no effect on the direction of Laboratory i.e., Laboratory and OraSure Technologies go up and down completely randomly.
Pair Corralation between Laboratory and OraSure Technologies
Allowing for the 90-day total investment horizon Laboratory of is expected to generate 0.38 times more return on investment than OraSure Technologies. However, Laboratory of is 2.64 times less risky than OraSure Technologies. It trades about -0.16 of its potential returns per unit of risk. OraSure Technologies is currently generating about -0.07 per unit of risk. If you would invest 23,714 in Laboratory of on September 21, 2024 and sell it today you would lose (853.00) from holding Laboratory of or give up 3.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laboratory of vs. OraSure Technologies
Performance |
| Timeline |
| Laboratory |
| OraSure Technologies |
Laboratory and OraSure Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laboratory and OraSure Technologies
The main advantage of trading using opposite Laboratory and OraSure Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory position performs unexpectedly, OraSure Technologies 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 OraSure Technologies will offset losses from the drop in OraSure Technologies' long position.| Laboratory vs. ASGN Inc | Laboratory vs. Kforce Inc | Laboratory vs. Kelly Services A | Laboratory vs. Central Garden Pet |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |