Correlation Between Singular Genomics and NOHO

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

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

Diversification Opportunities for Singular Genomics and NOHO

-0.61

Correlation Coefficient

Singular Genomics  NOHO

Excellent diversification

The 3 months correlation between Singular and NOHO is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Singular Genomics Systems and NOHO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOHO Inc and Singular Genomics 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 Singular Genomics Systems are associated (or correlated) with NOHO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOHO Inc has no effect on the direction of Singular Genomics i.e., Singular Genomics and NOHO go up and down completely randomly.

Pair Corralation between Singular Genomics and NOHO

Given the investment horizon of 90 days Singular Genomics Systems is expected to under-perform the NOHO. But the stock apears to be less risky and, when comparing its historical volatility, Singular Genomics Systems is 17.3 times less risky than NOHO. The stock trades about -0.09 of its potential returns per unit of risk. The NOHO Inc is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.01  in NOHO Inc on September 5, 2024 and sell it today you would earn a total of  0.01  from holding NOHO Inc or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Singular Genomics Systems  vs.  NOHO Inc

Singular Genomics Systems

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singular Genomics Systems are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Singular Genomics exhibited solid returns over the last few months and may actually be approaching a breakup point.

NOHO Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NOHO Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, NOHO disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Singular Genomics and NOHO

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

The idea behind Singular Genomics Systems and NOHO 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.