Correlation Between Myriad Genetics and EXACT Sciences

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

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

Diversification Opportunities for Myriad Genetics and EXACT Sciences

0.52

Correlation Coefficient

Myriad Genetics  EXACT Sciences

Very weak diversification

The 3 months correlation between Myriad and EXACT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Myriad Genetics and EXACT Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXACT Sciences and Myriad Genetics 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 Myriad Genetics are associated (or correlated) with EXACT Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXACT Sciences has no effect on the direction of Myriad Genetics i.e., Myriad Genetics and EXACT Sciences go up and down completely randomly.

Pair Corralation between Myriad Genetics and EXACT Sciences

Given the investment horizon of 90 days Myriad Genetics is expected to under-perform the EXACT Sciences. In addition to that, Myriad Genetics is 1.48 times more volatile than EXACT Sciences. It trades about -0.14 of its total potential returns per unit of risk. EXACT Sciences is currently generating about -0.16 per unit of volatility. If you would invest  6,208  in EXACT Sciences on November 28, 2024 and sell it today you would lose (1,358) from holding EXACT Sciences or give up 21.87% of portfolio value over 90 days.

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

Myriad Genetics  vs.  EXACT Sciences

Myriad Genetics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Myriad Genetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

EXACT Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days EXACT Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Myriad Genetics and EXACT Sciences

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

The idea behind Myriad Genetics and EXACT 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.