Correlation Between Tela Bio and Singular Genomics

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

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

Diversification Opportunities for Tela Bio and Singular Genomics

-0.1

Correlation Coefficient

Tela Bio  Singular Genomics

Good diversification

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

Pair Corralation between Tela Bio and Singular Genomics

Given the investment horizon of 90 days Tela Bio is expected to generate 0.81 times more return on investment than Singular Genomics. However, Tela Bio is 1.23 times less risky than Singular Genomics. It trades about 0.03 of its potential returns per unit of risk. Singular Genomics Systems is currently generating about -0.11 per unit of risk. If you would invest  541.00  in Tela Bio on March 14, 2024 and sell it today you would earn a total of  20.00  from holding Tela Bio or generate 3.7% return on investment over 90 days.

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

Tela Bio  vs.  Singular Genomics Systems

Tela Bio

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tela Bio are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Tela Bio may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Singular Genomics Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singular Genomics Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Tela Bio and Singular Genomics

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

The idea behind Tela Bio and Singular Genomics Systems 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.