Correlation Between Bionano Genomics and Sharps Technology

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

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

Diversification Opportunities for Bionano Genomics and Sharps Technology

0.64

Correlation Coefficient

Bionano Genomics  Sharps Technology

Poor diversification

The 3 months correlation between Bionano and Sharps is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bionano Genomics and Sharps Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharps Technology and Bionano Genomics 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 Bionano Genomics are associated (or correlated) with Sharps Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharps Technology has no effect on the direction of Bionano Genomics i.e., Bionano Genomics and Sharps Technology go up and down completely randomly.

Pair Corralation between Bionano Genomics and Sharps Technology

Given the investment horizon of 90 days Bionano Genomics is expected to under-perform the Sharps Technology. But the stock apears to be less risky and, when comparing its historical volatility, Bionano Genomics is 1.95 times less risky than Sharps Technology. The stock trades about -0.12 of its potential returns per unit of risk. The Sharps Technology is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,824  in Sharps Technology on September 12, 2024 and sell it today you would lose (1,618) from holding Sharps Technology or give up 88.71% of portfolio value over 90 days.

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

Bionano Genomics  vs.  Sharps Technology

Bionano Genomics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bionano Genomics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and 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.

Sharps Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bionano Genomics and Sharps Technology

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

The idea behind Bionano Genomics and Sharps Technology 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.