Correlation Between Exagen and Waters
Can any of the company-specific risk be diversified away by investing in both Exagen and Waters 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 Exagen and Waters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exagen Inc and Waters, you can compare the effects of market volatilities on Exagen and Waters 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 Exagen with a short position of Waters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exagen and Waters.
Diversification Opportunities for Exagen and Waters
Good diversification
The 3 months correlation between Exagen and Waters is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and Waters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waters and Exagen 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 Exagen Inc are associated (or correlated) with Waters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waters has no effect on the direction of Exagen i.e., Exagen and Waters go up and down completely randomly.
Pair Corralation between Exagen and Waters
Considering the 90-day investment horizon Exagen Inc is expected to generate 1.43 times more return on investment than Waters. However, Exagen is 1.43 times more volatile than Waters. It trades about 0.32 of its potential returns per unit of risk. Waters is currently generating about 0.16 per unit of risk. If you would invest 269.00 in Exagen Inc on August 26, 2024 and sell it today you would earn a total of 141.00 from holding Exagen Inc or generate 52.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exagen Inc vs. Waters
Performance |
| Timeline |
| Exagen Inc |
| Waters |
Exagen and Waters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exagen and Waters
The main advantage of trading using opposite Exagen and Waters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exagen position performs unexpectedly, Waters 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 Waters will offset losses from the drop in Waters' long position.| Exagen vs. Fonar | Exagen vs. Burning Rock Biotech | Exagen vs. Sera Prognostics | Exagen vs. Castle Biosciences |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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