Correlation Between Enzo Biochem and OncoCyte Corp

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

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

Diversification Opportunities for Enzo Biochem and OncoCyte Corp

0.11

Correlation Coefficient

Enzo Biochem  OncoCyte Corp

Average diversification

The 3 months correlation between Enzo and OncoCyte is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Enzo Biochem and OncoCyte Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OncoCyte Corp and Enzo Biochem 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 Enzo Biochem are associated (or correlated) with OncoCyte Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OncoCyte Corp has no effect on the direction of Enzo Biochem i.e., Enzo Biochem and OncoCyte Corp go up and down completely randomly.

Pair Corralation between Enzo Biochem and OncoCyte Corp

Considering the 90-day investment horizon Enzo Biochem is expected to generate 0.57 times more return on investment than OncoCyte Corp. However, Enzo Biochem is 1.76 times less risky than OncoCyte Corp. It trades about 0.08 of its potential returns per unit of risk. OncoCyte Corp is currently generating about -0.08 per unit of risk. If you would invest  97.00  in Enzo Biochem on September 5, 2024 and sell it today you would earn a total of  10.00  from holding Enzo Biochem or generate 10.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.82%
Values	Daily Returns

Enzo Biochem  vs.  OncoCyte Corp

Enzo Biochem

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enzo Biochem are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Enzo Biochem may actually be approaching a critical reversion point that can send shares even higher in January 2025.

OncoCyte Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OncoCyte Corp 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 fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Enzo Biochem and OncoCyte Corp

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

The idea behind Enzo Biochem and OncoCyte Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.