Correlation Between Co Diagnostics and Avista

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

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

Diversification Opportunities for Co Diagnostics and Avista

-0.04

Correlation Coefficient

Co Diagnostics  Avista

Good diversification

The 3 months correlation between CODX and Avista is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Co Diagnostics and Avista in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avista and Co Diagnostics 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 Co Diagnostics are associated (or correlated) with Avista. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avista has no effect on the direction of Co Diagnostics i.e., Co Diagnostics and Avista go up and down completely randomly.

Pair Corralation between Co Diagnostics and Avista

Given the investment horizon of 90 days Co Diagnostics is expected to generate 4.69 times more return on investment than Avista. However, Co Diagnostics is 4.69 times more volatile than Avista. It trades about 0.09 of its potential returns per unit of risk. Avista is currently generating about -0.01 per unit of risk. If you would invest  24.00  in Co Diagnostics on May 22, 2025 and sell it today you would earn a total of  5.00  from holding Co Diagnostics or generate 20.83% return on investment over 90 days.

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

Co Diagnostics  vs.  Avista

Co Diagnostics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Co Diagnostics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Co Diagnostics showed solid returns over the last few months and may actually be approaching a breakup point.

Avista

Risk-Adjusted Performance

Weakest

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

Pair Trading with Co Diagnostics and Avista

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

The idea behind Co Diagnostics and Avista 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.