Correlation Between GlucoTrack and Bionano Genomics

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

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

Diversification Opportunities for GlucoTrack and Bionano Genomics

0.88

Correlation Coefficient

GlucoTrack  Bionano Genomics

Very poor diversification

The 3 months correlation between GlucoTrack and Bionano is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding GlucoTrack and Bionano Genomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionano Genomics and GlucoTrack 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 GlucoTrack are associated (or correlated) with Bionano Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionano Genomics has no effect on the direction of GlucoTrack i.e., GlucoTrack and Bionano Genomics go up and down completely randomly.

Pair Corralation between GlucoTrack and Bionano Genomics

Given the investment horizon of 90 days GlucoTrack is expected to under-perform the Bionano Genomics. In addition to that, GlucoTrack is 2.2 times more volatile than Bionano Genomics. It trades about -0.19 of its total potential returns per unit of risk. Bionano Genomics is currently generating about -0.16 per unit of volatility. If you would invest  45.00  in Bionano Genomics on September 12, 2024 and sell it today you would lose (21.89) from holding Bionano Genomics or give up 48.64% of portfolio value over 90 days.

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

GlucoTrack  vs.  Bionano Genomics

GlucoTrack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GlucoTrack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with GlucoTrack and Bionano Genomics

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

The idea behind GlucoTrack and Bionano Genomics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.