Correlation Between BioAffinity Technologies and Sotera Health

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

Diversification Opportunities for BioAffinity Technologies and Sotera Health

-0.27

Correlation Coefficient

BioAffinity Technologies  Sotera Health

Very good diversification

The 3 months correlation between BioAffinity and Sotera is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding bioAffinity Technologies Warra and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health 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 Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of BioAffinity Technologies i.e., BioAffinity Technologies and Sotera Health go up and down completely randomly.

Pair Corralation between BioAffinity Technologies and Sotera Health

Assuming the 90 days horizon bioAffinity Technologies Warrant is expected to generate 10.68 times more return on investment than Sotera Health. However, BioAffinity Technologies is 10.68 times more volatile than Sotera Health Co. It trades about 0.02 of its potential returns per unit of risk. Sotera Health Co is currently generating about -0.04 per unit of risk. If you would invest  73.00  in bioAffinity Technologies Warrant on December 2, 2024 and sell it today you would lose (32.00) from holding bioAffinity Technologies Warrant or give up 43.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.69%
Values	Daily Returns

bioAffinity Technologies Warra  vs.  Sotera Health Co

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 1 (%) 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.

Sotera Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sotera Health Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Sotera Health is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BioAffinity Technologies and Sotera Health

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

The idea behind bioAffinity Technologies Warrant and Sotera Health Co 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 CEOs Directory module to screen CEOs from public companies around the world.