Correlation Between Sera Prognostics and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Sera Prognostics and Sotera Health 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 Sera Prognostics and Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sera Prognostics and Sotera Health Co, you can compare the effects of market volatilities on Sera Prognostics and Sotera Health 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 Sera Prognostics with a short position of Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sera Prognostics and Sotera Health.
Diversification Opportunities for Sera Prognostics and Sotera Health
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sera and Sotera is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sera Prognostics and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and Sera Prognostics 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 Sera Prognostics are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Sera Prognostics i.e., Sera Prognostics and Sotera Health go up and down completely randomly.
Pair Corralation between Sera Prognostics and Sotera Health
Given the investment horizon of 90 days Sera Prognostics is expected to generate 2.75 times more return on investment than Sotera Health. However, Sera Prognostics is 2.75 times more volatile than Sotera Health Co. It trades about -0.03 of its potential returns per unit of risk. Sotera Health Co is currently generating about -0.3 per unit of risk. If you would invest 700.00 in Sera Prognostics on August 27, 2024 and sell it today you would lose (62.00) from holding Sera Prognostics or give up 8.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sera Prognostics vs. Sotera Health Co
Performance |
| Timeline |
| Sera Prognostics |
| Sotera Health |
Sera Prognostics and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sera Prognostics and Sotera Health
The main advantage of trading using opposite Sera Prognostics and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sera Prognostics position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| Sera Prognostics vs. Fonar | Sera Prognostics vs. Burning Rock Biotech | Sera Prognostics vs. Exagen Inc | Sera Prognostics vs. Sotera Health Co |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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