Correlation Between Pacific Biosciences and OpGen

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

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

Diversification Opportunities for Pacific Biosciences and OpGen

-0.34

Correlation Coefficient

Pacific Biosciences  OpGen

Very good diversification

The 3 months correlation between Pacific and OpGen is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Biosciences of and OpGen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OpGen Inc and Pacific Biosciences 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 Pacific Biosciences of are associated (or correlated) with OpGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OpGen Inc has no effect on the direction of Pacific Biosciences i.e., Pacific Biosciences and OpGen go up and down completely randomly.

Pair Corralation between Pacific Biosciences and OpGen

Given the investment horizon of 90 days Pacific Biosciences of is expected to under-perform the OpGen. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Biosciences of is 2.08 times less risky than OpGen. The stock trades about -0.02 of its potential returns per unit of risk. The OpGen Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,190  in OpGen Inc on October 10, 2024 and sell it today you would lose (1,000.00) from holding OpGen Inc or give up 84.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.55%
Values	Daily Returns

Pacific Biosciences of  vs.  OpGen Inc

Pacific Biosciences

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Biosciences of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Pacific Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

OpGen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OpGen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, OpGen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pacific Biosciences and OpGen

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

The idea behind Pacific Biosciences of and OpGen 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.