Correlation Between Biodesix and OncoCyte Corp

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

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

Diversification Opportunities for Biodesix and OncoCyte Corp

0.71

Correlation Coefficient

Biodesix  OncoCyte Corp

Poor diversification

The 3 months correlation between Biodesix and OncoCyte is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Biodesix and OncoCyte Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OncoCyte Corp and Biodesix 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 Biodesix are associated (or correlated) with OncoCyte Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OncoCyte Corp has no effect on the direction of Biodesix i.e., Biodesix and OncoCyte Corp go up and down completely randomly.

Pair Corralation between Biodesix and OncoCyte Corp

Given the investment horizon of 90 days Biodesix is expected to generate 1.38 times more return on investment than OncoCyte Corp. However, Biodesix is 1.38 times more volatile than OncoCyte Corp. It trades about -0.07 of its potential returns per unit of risk. OncoCyte Corp is currently generating about -0.1 per unit of risk. If you would invest  185.00  in Biodesix on September 2, 2024 and sell it today you would lose (41.00) from holding Biodesix or give up 22.16% of portfolio value over 90 days.

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

Biodesix  vs.  OncoCyte Corp

Biodesix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biodesix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

OncoCyte Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OncoCyte Corp 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 fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Biodesix and OncoCyte Corp

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

The idea behind Biodesix and OncoCyte Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.