Correlation Between Applied DNA and Rushnet

Can any of the company-specific risk be diversified away by investing in both Applied DNA and Rushnet 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 Rushnet 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 Rushnet, you can compare the effects of market volatilities on Applied DNA and Rushnet 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 Rushnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied DNA and Rushnet.

Diversification Opportunities for Applied DNA and Rushnet

0.0

Correlation Coefficient

Applied DNA  Rushnet

Pay attention - limited upside

The 3 months correlation between Applied and Rushnet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied DNA Sciences and Rushnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rushnet 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 Rushnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rushnet has no effect on the direction of Applied DNA i.e., Applied DNA and Rushnet go up and down completely randomly.

Pair Corralation between Applied DNA and Rushnet

Given the investment horizon of 90 days Applied DNA Sciences is expected to under-perform the Rushnet. But the stock apears to be less risky and, when comparing its historical volatility, Applied DNA Sciences is 3.85 times less risky than Rushnet. The stock trades about -0.22 of its potential returns per unit of risk. The Rushnet is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Rushnet on December 28, 2024 and sell it today you would lose (0.01) from holding Rushnet or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Applied DNA Sciences  vs.  Rushnet

Applied DNA Sciences

Risk-Adjusted Performance

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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Rushnet

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rushnet are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical indicators, Rushnet displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applied DNA and Rushnet

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

The idea behind Applied DNA Sciences and Rushnet 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.