Correlation Between Biodesix and Genetron Holdings

Can any of the company-specific risk be diversified away by investing in both Biodesix and Genetron Holdings 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 Biodesix and Genetron Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Biodesix and Genetron Holdings, you can compare the effects of market volatilities on Biodesix and Genetron Holdings 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 Biodesix with a short position of Genetron Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biodesix and Genetron Holdings.

Diversification Opportunities for Biodesix and Genetron Holdings

-0.64

Correlation Coefficient

Biodesix  Genetron Holdings

Excellent diversification

The 3 months correlation between Biodesix and Genetron is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Biodesix and Genetron Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetron Holdings and Biodesix 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 Biodesix are associated (or correlated) with Genetron Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetron Holdings has no effect on the direction of Biodesix i.e., Biodesix and Genetron Holdings go up and down completely randomly.

Pair Corralation between Biodesix and Genetron Holdings

If you would invest  163.00  in Biodesix on July 24, 2024 and sell it today you would lose (2.00) from holding Biodesix or give up 1.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Biodesix  vs.  Genetron Holdings

Biodesix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biodesix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Biodesix is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Genetron Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genetron Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Genetron Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Biodesix and Genetron Holdings

The main advantage of trading using opposite Biodesix and Genetron Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biodesix position performs unexpectedly, Genetron Holdings 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 Genetron Holdings will offset losses from the drop in Genetron Holdings' long position.

The idea behind Biodesix and Genetron Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.