Correlation Between Cardio Diagnostics and Alpha Teknova

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

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

Diversification Opportunities for Cardio Diagnostics and Alpha Teknova

0.14

Correlation Coefficient

Cardio Diagnostics  Alpha Teknova

Average diversification

The 3 months correlation between Cardio and Alpha is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and Alpha Teknova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Teknova and Cardio Diagnostics 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 Cardio Diagnostics Holdings are associated (or correlated) with Alpha Teknova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Teknova has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and Alpha Teknova go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and Alpha Teknova

Given the investment horizon of 90 days Cardio Diagnostics Holdings is expected to generate 2.94 times more return on investment than Alpha Teknova. However, Cardio Diagnostics is 2.94 times more volatile than Alpha Teknova. It trades about 0.11 of its potential returns per unit of risk. Alpha Teknova is currently generating about -0.01 per unit of risk. If you would invest  30.00  in Cardio Diagnostics Holdings on December 2, 2024 and sell it today you would earn a total of  15.00  from holding Cardio Diagnostics Holdings or generate 50.0% return on investment over 90 days.

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

Cardio Diagnostics Holdings  vs.  Alpha Teknova

Cardio Diagnostics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cardio Diagnostics Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Cardio Diagnostics displayed solid returns over the last few months and may actually be approaching a breakup point.

Alpha Teknova

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha Teknova has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Alpha Teknova is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cardio Diagnostics and Alpha Teknova

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

The idea behind Cardio Diagnostics Holdings and Alpha Teknova 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.