Correlation Between Bionano Genomics and Wearable Health

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

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

Diversification Opportunities for Bionano Genomics and Wearable Health

0.0

Correlation Coefficient

Bionano Genomics  Wearable Health

Pay attention - limited upside

The 3 months correlation between Bionano and Wearable is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bionano Genomics and Wearable Health Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wearable Health Solutions 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 Wearable Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wearable Health Solutions has no effect on the direction of Bionano Genomics i.e., Bionano Genomics and Wearable Health go up and down completely randomly.

Pair Corralation between Bionano Genomics and Wearable Health

Given the investment horizon of 90 days Bionano Genomics is expected to under-perform the Wearable Health. But the stock apears to be less risky and, when comparing its historical volatility, Bionano Genomics is 2.34 times less risky than Wearable Health. The stock trades about -0.15 of its potential returns per unit of risk. The Wearable Health Solutions is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  0.07  in Wearable Health Solutions on September 5, 2024 and sell it today you would lose (0.06) from holding Wearable Health Solutions or give up 85.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bionano Genomics  vs.  Wearable Health Solutions

Bionano Genomics

Risk-Adjusted Performance

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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 fragile 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.

Wearable Health Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wearable Health Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Wearable Health is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bionano Genomics and Wearable Health

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

The idea behind Bionano Genomics and Wearable Health Solutions 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 Stocks Directory module to find actively traded stocks across global markets.