Correlation Between Caredx and Olink Holding

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

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

Diversification Opportunities for Caredx and Olink Holding

0.0

Correlation Coefficient

Caredx  Olink Holding

Pay attention - limited upside

The 3 months correlation between Caredx and Olink is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caredx Inc and Olink Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olink Holding AB and Caredx 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 Caredx Inc are associated (or correlated) with Olink Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olink Holding AB has no effect on the direction of Caredx i.e., Caredx and Olink Holding go up and down completely randomly.

Pair Corralation between Caredx and Olink Holding

If you would invest  1,842  in Caredx Inc on July 24, 2024 and sell it today you would earn a total of  472.00  from holding Caredx Inc or generate 25.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Caredx Inc  vs.  Olink Holding AB

Caredx Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caredx Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Caredx sustained solid returns over the last few months and may actually be approaching a breakup point.

Olink Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Olink Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Olink Holding is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Caredx and Olink Holding

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

The idea behind Caredx Inc and Olink Holding AB 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.