Correlation Between ISpecimen and Personalis

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

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

Diversification Opportunities for ISpecimen and Personalis

0.28

Correlation Coefficient

ISpecimen  Personalis

Modest diversification

The 3 months correlation between ISpecimen and Personalis is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding iSpecimen and Personalis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Personalis 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 Personalis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Personalis has no effect on the direction of ISpecimen i.e., ISpecimen and Personalis go up and down completely randomly.

Pair Corralation between ISpecimen and Personalis

Given the investment horizon of 90 days iSpecimen is expected to generate 1.57 times more return on investment than Personalis. However, ISpecimen is 1.57 times more volatile than Personalis. It trades about 0.01 of its potential returns per unit of risk. Personalis is currently generating about -0.04 per unit of risk. If you would invest  528.00  in iSpecimen on September 2, 2024 and sell it today you would lose (99.00) from holding iSpecimen or give up 18.75% of portfolio value over 90 days.

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

iSpecimen  vs.  Personalis

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.

Personalis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Personalis 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.

Pair Trading with ISpecimen and Personalis

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

The idea behind iSpecimen and Personalis 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.