Correlation Between Epigenomics and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Epigenomics and Sotera Health 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 Epigenomics and Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epigenomics AG and Sotera Health Co, you can compare the effects of market volatilities on Epigenomics and Sotera Health 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 Epigenomics with a short position of Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epigenomics and Sotera Health.
Diversification Opportunities for Epigenomics and Sotera Health
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Epigenomics and Sotera is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Epigenomics AG and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and Epigenomics 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 Epigenomics AG are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Epigenomics i.e., Epigenomics and Sotera Health go up and down completely randomly.
Pair Corralation between Epigenomics and Sotera Health
Assuming the 90 days horizon Epigenomics AG is expected to generate 6.28 times more return on investment than Sotera Health. However, Epigenomics is 6.28 times more volatile than Sotera Health Co. It trades about 0.07 of its potential returns per unit of risk. Sotera Health Co is currently generating about 0.0 per unit of risk. If you would invest 55.00 in Epigenomics AG on February 13, 2024 and sell it today you would lose (5.00) from holding Epigenomics AG or give up 9.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Epigenomics AG vs. Sotera Health Co
Performance |
Timeline |
Epigenomics AG |
Sotera Health |
Epigenomics and Sotera Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Epigenomics and Sotera Health
The main advantage of trading using opposite Epigenomics and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epigenomics position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.Epigenomics vs. Neuronetics | Epigenomics vs. Intelligent Bio Solutions | Epigenomics vs. BiodesixInc | Epigenomics vs. Precipio |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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