Correlation Between ISpecimen and Enzo Biochem

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

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

Diversification Opportunities for ISpecimen and Enzo Biochem

0.15

Correlation Coefficient

ISpecimen  Enzo Biochem

Average diversification

The 3 months correlation between ISpecimen and Enzo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding iSpecimen and Enzo Biochem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzo Biochem and ISpecimen 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 iSpecimen are associated (or correlated) with Enzo Biochem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzo Biochem has no effect on the direction of ISpecimen i.e., ISpecimen and Enzo Biochem go up and down completely randomly.

Pair Corralation between ISpecimen and Enzo Biochem

Given the investment horizon of 90 days ISpecimen is expected to generate 1.71 times less return on investment than Enzo Biochem. In addition to that, ISpecimen is 5.0 times more volatile than Enzo Biochem. It trades about 0.01 of its total potential returns per unit of risk. Enzo Biochem is currently generating about 0.06 per unit of volatility. If you would invest  101.00  in Enzo Biochem on September 5, 2024 and sell it today you would earn a total of  6.00  from holding Enzo Biochem or generate 5.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

iSpecimen  vs.  Enzo Biochem

iSpecimen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iSpecimen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ISpecimen is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with ISpecimen and Enzo Biochem

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

The idea behind iSpecimen and Enzo Biochem 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.