Correlation Between Bionano Genomics and ICU Medical

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

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

Diversification Opportunities for Bionano Genomics and ICU Medical

-0.27

Correlation Coefficient

Bionano Genomics  ICU Medical

Very good diversification

The 3 months correlation between Bionano and ICU is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bionano Genomics and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical and Bionano Genomics 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 Bionano Genomics are associated (or correlated) with ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of Bionano Genomics i.e., Bionano Genomics and ICU Medical go up and down completely randomly.

Pair Corralation between Bionano Genomics and ICU Medical

Given the investment horizon of 90 days Bionano Genomics is expected to generate 2.21 times more return on investment than ICU Medical. However, Bionano Genomics is 2.21 times more volatile than ICU Medical. It trades about 0.01 of its potential returns per unit of risk. ICU Medical is currently generating about -0.02 per unit of risk. If you would invest  408.00  in Bionano Genomics on March 7, 2025 and sell it today you would lose (34.00) from holding Bionano Genomics or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bionano Genomics  vs.  ICU Medical

Bionano Genomics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bionano Genomics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Bionano Genomics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ICU Medical

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bionano Genomics and ICU Medical

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

The idea behind Bionano Genomics and ICU Medical 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 CEOs Directory module to screen CEOs from public companies around the world.