Correlation Between Applied DNA and SeqLL

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

Diversification Opportunities for Applied DNA and SeqLL

0.15

Correlation Coefficient

Applied DNA  SeqLL

Average diversification

The 3 months correlation between Applied and SeqLL is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Applied DNA Sciences and SeqLL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeqLL Inc 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 SeqLL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeqLL Inc has no effect on the direction of Applied DNA i.e., Applied DNA and SeqLL go up and down completely randomly.

Pair Corralation between Applied DNA and SeqLL

If you would invest  39.00  in SeqLL Inc on September 14, 2024 and sell it today you would earn a total of  0.00  from holding SeqLL Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.37%
Values	Daily Returns

Applied DNA Sciences  vs.  SeqLL Inc

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

SeqLL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SeqLL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, SeqLL is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Applied DNA and SeqLL

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

The idea behind Applied DNA Sciences and SeqLL Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.