Correlation Between Standard Biotools and ENDRA Life

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

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

Diversification Opportunities for Standard Biotools and ENDRA Life

0.31

Correlation Coefficient

Standard Biotools  ENDRA Life

Weak diversification

The 3 months correlation between Standard and ENDRA is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Standard Biotools and ENDRA Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENDRA Life Sciences and Standard Biotools 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 Standard Biotools are associated (or correlated) with ENDRA Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENDRA Life Sciences has no effect on the direction of Standard Biotools i.e., Standard Biotools and ENDRA Life go up and down completely randomly.

Pair Corralation between Standard Biotools and ENDRA Life

Considering the 90-day investment horizon Standard Biotools is expected to under-perform the ENDRA Life. In addition to that, Standard Biotools is 1.09 times more volatile than ENDRA Life Sciences. It trades about -0.1 of its total potential returns per unit of risk. ENDRA Life Sciences is currently generating about -0.04 per unit of volatility. If you would invest  571.00  in ENDRA Life Sciences on November 29, 2024 and sell it today you would lose (102.00) from holding ENDRA Life Sciences or give up 17.86% of portfolio value over 90 days.

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

Standard Biotools  vs.  ENDRA Life Sciences

Standard Biotools

Risk-Adjusted Performance

Very Weak

Over the last 90 days Standard Biotools has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ENDRA Life Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days ENDRA Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Standard Biotools and ENDRA Life

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

The idea behind Standard Biotools and ENDRA Life Sciences 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.