Correlation Between Sona Nanotech and Biodesix
Can any of the company-specific risk be diversified away by investing in both Sona Nanotech and Biodesix 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 Sona Nanotech and Biodesix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sona Nanotech and Biodesix, you can compare the effects of market volatilities on Sona Nanotech and Biodesix 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 Sona Nanotech with a short position of Biodesix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sona Nanotech and Biodesix.
Diversification Opportunities for Sona Nanotech and Biodesix
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sona and Biodesix is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sona Nanotech and Biodesix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodesix and Sona Nanotech 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 Sona Nanotech are associated (or correlated) with Biodesix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodesix has no effect on the direction of Sona Nanotech i.e., Sona Nanotech and Biodesix go up and down completely randomly.
Pair Corralation between Sona Nanotech and Biodesix
Assuming the 90 days horizon Sona Nanotech is expected to generate 1.05 times more return on investment than Biodesix. However, Sona Nanotech is 1.05 times more volatile than Biodesix. It trades about 0.0 of its potential returns per unit of risk. Biodesix is currently generating about -0.09 per unit of risk. If you would invest 20.00 in Sona Nanotech on September 1, 2024 and sell it today you would lose (1.00) from holding Sona Nanotech or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sona Nanotech vs. Biodesix
Performance |
| Timeline |
| Sona Nanotech |
| Biodesix |
Sona Nanotech and Biodesix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sona Nanotech and Biodesix
The main advantage of trading using opposite Sona Nanotech and Biodesix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sona Nanotech position performs unexpectedly, Biodesix 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 Biodesix will offset losses from the drop in Biodesix's long position.| Sona Nanotech vs. Biodesix | Sona Nanotech vs. Neuronetics | Sona Nanotech vs. ENDRA Life Sciences | Sona Nanotech vs. Genetic Technologies |
| Biodesix vs. Aclaris Therapeutics | Biodesix vs. Castle Biosciences | Biodesix vs. Prenetics Global | Biodesix vs. DarioHealth Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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