Correlation Between NeoGenomics and Natera

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

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

Diversification Opportunities for NeoGenomics and Natera

0.68

Correlation Coefficient

NeoGenomics  Natera

Poor diversification

The 3 months correlation between NeoGenomics and Natera is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NeoGenomics and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera Inc and NeoGenomics 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 NeoGenomics are associated (or correlated) with Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of NeoGenomics i.e., NeoGenomics and Natera go up and down completely randomly.

Pair Corralation between NeoGenomics and Natera

Considering the 90-day investment horizon NeoGenomics is expected to under-perform the Natera. In addition to that, NeoGenomics is 2.09 times more volatile than Natera Inc. It trades about -0.13 of its total potential returns per unit of risk. Natera Inc is currently generating about -0.03 per unit of volatility. If you would invest  15,855  in Natera Inc on December 29, 2024 and sell it today you would lose (1,025) from holding Natera Inc or give up 6.46% of portfolio value over 90 days.

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

NeoGenomics  vs.  Natera Inc

NeoGenomics

Risk-Adjusted Performance

Very Weak

Over the last 90 days NeoGenomics 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 technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Natera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Natera is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NeoGenomics and Natera

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

The idea behind NeoGenomics and Natera Inc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.