Correlation Between Olink Holding and Castle Biosciences
Can any of the company-specific risk be diversified away by investing in both Olink Holding 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 Olink Holding and Castle Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olink Holding AB and Castle Biosciences, you can compare the effects of market volatilities on Olink Holding 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 Olink Holding with a short position of Castle Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olink Holding and Castle Biosciences.
Diversification Opportunities for Olink Holding and Castle Biosciences
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Olink and Castle is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Olink Holding AB and Castle Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castle Biosciences and Olink Holding 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 Olink Holding AB 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 Olink Holding i.e., Olink Holding and Castle Biosciences go up and down completely randomly.
Pair Corralation between Olink Holding and Castle Biosciences
Considering the 90-day investment horizon Olink Holding is expected to generate 21.07 times less return on investment than Castle Biosciences. But when comparing it to its historical volatility, Olink Holding AB is 3.75 times less risky than Castle Biosciences. It trades about 0.01 of its potential returns per unit of risk. Castle Biosciences is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,948 in Castle Biosciences on August 24, 2024 and sell it today you would earn a total of 940.00 from holding Castle Biosciences or generate 48.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 62.0% |
| Values | Daily Returns |
Olink Holding AB vs. Castle Biosciences
Performance |
| Timeline |
| Olink Holding AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Castle Biosciences |
Olink Holding and Castle Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olink Holding and Castle Biosciences
The main advantage of trading using opposite Olink Holding and Castle Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olink Holding 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.| Olink Holding vs. Fonar | Olink Holding vs. Burning Rock Biotech | Olink Holding vs. Sera Prognostics | Olink Holding vs. Psychemedics |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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