Correlation Between Applied DNA and Interpace Biosciences

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

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

Diversification Opportunities for Applied DNA and Interpace Biosciences

-0.32

Correlation Coefficient

Applied DNA  Interpace Biosciences

Very good diversification

The 3 months correlation between Applied and Interpace is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Applied DNA Sciences and Interpace Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpace Biosciences and Applied DNA 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 Applied DNA Sciences are associated (or correlated) with Interpace Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpace Biosciences has no effect on the direction of Applied DNA i.e., Applied DNA and Interpace Biosciences go up and down completely randomly.

Pair Corralation between Applied DNA and Interpace Biosciences

If you would invest  220.00  in Interpace Biosciences on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Interpace Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Applied DNA Sciences  vs.  Interpace Biosciences

Applied DNA Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied DNA Sciences 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 fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Interpace Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interpace Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Interpace Biosciences is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Applied DNA and Interpace Biosciences

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

The idea behind Applied DNA Sciences and Interpace Biosciences 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.