Correlation Between BioAffinity Technologies and Natera

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

By analyzing existing cross correlation between bioAffinity Technologies Warrant and Natera Inc, you can compare the effects of market volatilities on BioAffinity Technologies and Natera 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 BioAffinity Technologies with a short position of Natera. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioAffinity Technologies and Natera.

Diversification Opportunities for BioAffinity Technologies and Natera

-0.06

Correlation Coefficient

BioAffinity Technologies  Natera

Good diversification

The 3 months correlation between BioAffinity and Natera is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding bioAffinity Technologies Warra and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera Inc and BioAffinity Technologies 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 bioAffinity Technologies Warrant are associated (or correlated) with Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of BioAffinity Technologies i.e., BioAffinity Technologies and Natera go up and down completely randomly.

Pair Corralation between BioAffinity Technologies and Natera

Assuming the 90 days horizon bioAffinity Technologies Warrant is expected to generate 8.58 times more return on investment than Natera. However, BioAffinity Technologies is 8.58 times more volatile than Natera Inc. It trades about 0.03 of its potential returns per unit of risk. Natera Inc is currently generating about -0.04 per unit of risk. If you would invest  72.00  in bioAffinity Technologies Warrant on November 29, 2024 and sell it today you would lose (26.00) from holding bioAffinity Technologies Warrant or give up 36.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.97%
Values	Daily Returns

bioAffinity Technologies Warra  vs.  Natera Inc

BioAffinity Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in bioAffinity Technologies Warrant are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, BioAffinity Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Natera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Natera is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BioAffinity Technologies and Natera

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

The idea behind bioAffinity Technologies Warrant and Natera 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.