Correlation Between MicroStrategy Incorporated and BioMark Diagnostics

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Can any of the company-specific risk be diversified away by investing in both MicroStrategy Incorporated and BioMark Diagnostics 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 MicroStrategy Incorporated and BioMark Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroStrategy Incorporated and BioMark Diagnostics, you can compare the effects of market volatilities on MicroStrategy Incorporated and BioMark Diagnostics 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 MicroStrategy Incorporated with a short position of BioMark Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroStrategy Incorporated and BioMark Diagnostics.

Diversification Opportunities for MicroStrategy Incorporated and BioMark Diagnostics

-0.81
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between MicroStrategy and BioMark is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding MicroStrategy Incorporated and BioMark Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioMark Diagnostics and MicroStrategy Incorporated 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 MicroStrategy Incorporated are associated (or correlated) with BioMark Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioMark Diagnostics has no effect on the direction of MicroStrategy Incorporated i.e., MicroStrategy Incorporated and BioMark Diagnostics go up and down completely randomly.

Pair Corralation between MicroStrategy Incorporated and BioMark Diagnostics

Given the investment horizon of 90 days MicroStrategy Incorporated is expected to generate 4.06 times more return on investment than BioMark Diagnostics. However, MicroStrategy Incorporated is 4.06 times more volatile than BioMark Diagnostics. It trades about 0.15 of its potential returns per unit of risk. BioMark Diagnostics is currently generating about 0.01 per unit of risk. If you would invest  34,000  in MicroStrategy Incorporated on September 12, 2024 and sell it today you would earn a total of  7,140  from holding MicroStrategy Incorporated or generate 21.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

MicroStrategy Incorporated  vs.  BioMark Diagnostics

 Performance 
       Timeline  
MicroStrategy Incorporated 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in MicroStrategy Incorporated are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, MicroStrategy Incorporated reported solid returns over the last few months and may actually be approaching a breakup point.
BioMark Diagnostics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BioMark Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MicroStrategy Incorporated and BioMark Diagnostics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MicroStrategy Incorporated and BioMark Diagnostics

The main advantage of trading using opposite MicroStrategy Incorporated and BioMark Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroStrategy Incorporated position performs unexpectedly, BioMark Diagnostics 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 BioMark Diagnostics will offset losses from the drop in BioMark Diagnostics' long position.
The idea behind MicroStrategy Incorporated and BioMark Diagnostics 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.
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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