Correlation Between Personalis and Natera

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

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

Diversification Opportunities for Personalis and Natera

0.1

Correlation Coefficient

Personalis  Natera

Average diversification

The 3 months correlation between Personalis and Natera is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Personalis and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera Inc 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 Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of Personalis i.e., Personalis and Natera go up and down completely randomly.

Pair Corralation between Personalis and Natera

Given the investment horizon of 90 days Personalis is expected to generate 2.16 times more return on investment than Natera. However, Personalis is 2.16 times more volatile than Natera Inc. It trades about 0.13 of its potential returns per unit of risk. Natera Inc is currently generating about -0.08 per unit of risk. If you would invest  400.00  in Personalis on May 6, 2025 and sell it today you would earn a total of  157.00  from holding Personalis or generate 39.25% return on investment over 90 days.

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

Personalis  vs.  Natera Inc

Personalis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Personalis are ranked lower than 10 (%) 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.

Natera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Personalis and Natera

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

The idea behind Personalis and Natera Inc 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 Transaction History module to view history of all your transactions and understand their impact on performance.