Correlation Between Personalis and Illumina

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

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

Diversification Opportunities for Personalis and Illumina

0.79

Correlation Coefficient

Personalis  Illumina

Poor diversification

The 3 months correlation between Personalis and Illumina is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Personalis and Illumina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illumina and Personalis 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 Personalis are associated (or correlated) with Illumina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illumina has no effect on the direction of Personalis i.e., Personalis and Illumina go up and down completely randomly.

Pair Corralation between Personalis and Illumina

Given the investment horizon of 90 days Personalis is expected to generate 1.64 times less return on investment than Illumina. In addition to that, Personalis is 1.52 times more volatile than Illumina. It trades about 0.06 of its total potential returns per unit of risk. Illumina is currently generating about 0.14 per unit of volatility. If you would invest  7,958  in Illumina on May 8, 2025 and sell it today you would earn a total of  1,818  from holding Illumina or generate 22.84% return on investment over 90 days.

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

Personalis  vs.  Illumina

Personalis

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Personalis are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Personalis disclosed solid returns over the last few months and may actually be approaching a breakup point.

Illumina

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Illumina are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Illumina displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Personalis and Illumina

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

The idea behind Personalis and Illumina 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.