Correlation Between ENDRA Life and Sera Prognostics

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

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

Diversification Opportunities for ENDRA Life and Sera Prognostics

0.87

Correlation Coefficient

ENDRA Life  Sera Prognostics

Very poor diversification

The 3 months correlation between ENDRA and Sera is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ENDRA Life Sciences and Sera Prognostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sera Prognostics and ENDRA Life 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 ENDRA Life Sciences are associated (or correlated) with Sera Prognostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sera Prognostics has no effect on the direction of ENDRA Life i.e., ENDRA Life and Sera Prognostics go up and down completely randomly.

Pair Corralation between ENDRA Life and Sera Prognostics

Given the investment horizon of 90 days ENDRA Life Sciences is expected to generate 0.91 times more return on investment than Sera Prognostics. However, ENDRA Life Sciences is 1.1 times less risky than Sera Prognostics. It trades about -0.12 of its potential returns per unit of risk. Sera Prognostics is currently generating about -0.21 per unit of risk. If you would invest  630.00  in ENDRA Life Sciences on December 27, 2024 and sell it today you would lose (205.00) from holding ENDRA Life Sciences or give up 32.54% of portfolio value over 90 days.

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

ENDRA Life Sciences  vs.  Sera Prognostics

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sera Prognostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sera Prognostics 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ENDRA Life and Sera Prognostics

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

The idea behind ENDRA Life Sciences and Sera Prognostics 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.