Correlation Between Olink Holding and BiodesixInc

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

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

Diversification Opportunities for Olink Holding and BiodesixInc

0.39

Correlation Coefficient

Olink Holding  BiodesixInc

Weak diversification

The 3 months correlation between Olink and BiodesixInc is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Olink Holding AB and BiodesixInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BiodesixInc and Olink Holding 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 Olink Holding AB are associated (or correlated) with BiodesixInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BiodesixInc has no effect on the direction of Olink Holding i.e., Olink Holding and BiodesixInc go up and down completely randomly.

Pair Corralation between Olink Holding and BiodesixInc

Considering the 90-day investment horizon Olink Holding AB is expected to under-perform the BiodesixInc. But the stock apears to be less risky and, when comparing its historical volatility, Olink Holding AB is 3.2 times less risky than BiodesixInc. The stock trades about -0.06 of its potential returns per unit of risk. The BiodesixInc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  142.00  in BiodesixInc on February 14, 2024 and sell it today you would earn a total of  10.00  from holding BiodesixInc or generate 7.04% return on investment over 90 days.

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

Olink Holding AB  vs.  BiodesixInc

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 current stock price mess, may contribute to short-term losses for the institutional investors.

BiodesixInc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Olink Holding and BiodesixInc

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

The idea behind Olink Holding AB and BiodesixInc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.